[fastfredracing]

I was just remembering the last time that I got stumped on a similar problem, it ended up being the module was kaput. I was getting similar weirdness from the switch, like showing 2 hi, and 4 low engaged at the same time ( mechanically impossible ) .
I am pretty sure that your module will have to be programmed/coded if you end up having to replace it .
From what I am reading in your post, you have already replaced the switch, and encoder motor, so that leaves, only faulty wiring, or a bad module .
I am pretty sure that a Snap On Scanner, or any decent scanner should be able to read the transfer case module, and see if there are any faults in it . I honestly cannot remember 100% though, that is kind of old.
The last one I did, was in a 2004 truck, but I believe the system is basically the same .
Gambler is correct, that the encoder motors were a common failure part. I have replaced tons of them over the years, but I have also had to replace a few switches, and a module or 2 as well .
You may need a mechanic with a good scanner for this one .