Had this problem on '02 explorer. Try a stab at the 4wd control module. On this vehic it was under/behind the glove box. Black box approx 1" x 5" x 7" One screw and one or two plug connections. Easy fix, but spendy $200-300. Shop around, different Ford dealers quoted me vastly diff prices. Good Luck.
PROBLEM COULD BE IN SWITCH.REMOVE SHIFT SWITCH CHECK TO SEE IF ANY POWER GOING TO SWITCH.IF YES SWITCH BAD IF NO YOU HAVE A OPEN WIRE FROM SWITCH TO FUSE BOX.
if you read the wiring diagram it show the switch as a adjustable resister (depending on if its 4 low or 4 high that sends a signal the the g.e.m (generic electronic control) . Not every switch has power to it. You want to ohm the switch out and check the parameters with a manual for each selection.
CHECK 4WD FUSE. IF ALL IS GOOD. 4WD CONTROL MODULE FAULTY.
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