Service 4wd 4WD low seems to be engaged even when lever on 2WD. Message ESPOFF appears in odometer and does not reset when ignition off. Also traction control light on. ESP button does not correct the problem.

SOURCE: I HAVE A NEW JEEP

Don't mess with it!!!!! Your new vehicle has a warranty. Get back to the dealer ASAP and don't take anything apart. You paid good money .... let them tear their hair out.....that's what they get paid for!!!!

SOURCE: 2005 Jeep Grand Cherokee (HEMI) Service Electric Brake System

Problem is a faulty Steering Angle Sensor (part of Steering Module) located in steering column ...replacement part $600.00.

SOURCE: 2005 Jeep Liberty stuck in Part Time 4wd

I questioned the dealer about my 2005 because mine was disengaging what I thought to be rough compared to what I was used to. They told me that I should shift the vehicle into Neutral before shifting the selector. I have also found that shifting between Reverse and Drive a couple of times while stopped has helped as well. By doing these couple of things, I have had no trouble since. I hope this helps as it might at least be something to try.

SOURCE: Switching back 4WD to 2WD - 1998 Jeep Cherokee 4L Limited Petrol

With any 4WD like this, always move a few feet in the opposite direction when disengaging. If you were moving fwd in 4wd, switch to 2wd, back up a few feet, then go fwd.

SOURCE: 4WD transfer box

yes, it has 4 low. you might need to get the linkage adjusted. if that doesn't work, then there are pads on the shift forks insde the transfer case that might need replacement.