So my 4x4 light has been on. Its been on since I put the new transmission and transfercase in.

Wire is hooked up same as it was.

'88 F-350

Any idea's?

 

Did you reuse your old sender, or did you get a new one w/ the new t-case?

 

Here's the schematic.

I'm assuming you have a manual shift transfer case.

The switch on the transfer case should have two wires going to it.
The Light Blue wire when grounded turns on the 4x4 indicator for 4HI.
The Light Blue/Black wire when grounded turns on the 4LOW indicator.

With the ignition on, if you unplug the connector, no 4 wheel drive indicator lights should be on.

Disregard the left side of the schematic which shows the auto shift 4x4 controller.

 

The transfercase came off my old transmission and went on the new one. I was saying new transfercase mainly to get the point across that it was unhooked from a transmission at one time.

It IS a manual shift transmission. When the wire is unplugged, neither light will come on. (Obviously) The "4x4" light is on no matter what position the shifter is it, if I flip the plug upside down on the transfercase then the "Low" light is on no matter what position it is in.

 

Item 41 in the diagram is the indicator switch. There also is a set screw item 42 at the end of the indicator switch. I'd remove the switch and look inside the transfer case to see what grounds the pins of the switch as you move the shifter lever.