quick way to stop the blinking. disconnect battery for about 10 min and reconnect.
depending on year of car (which you seem to not want to tell us) there are other ways

also for the 4wd system there is a TOD(torque on demand relay) that might be bad


I'm Glad I could help.
I had a problem with my transfer case. the Ford dealer gave me a qoute on $1750 to replace the transfer case. I felt like the symptons didn't match the diagnosis so I was forced to learn how the 4wd system works on a 1995. the result was that I changed a $30 speed sensor and now my system works fine. (and I learned quite a bit about the 4wd control-trac system.
Here's the $5.00 tour of your 4wd system.
1. PCM
The Powertrain Control Module (PCM) is the main computer for your car and also controls the engine and Transmission. the PCM is mounted on the engine side of the firewall in front of the passenger air bag.It is not serviceable but is very easy to change ($300.00). It is notorious for going bad at about 100,000 Miles
2. transmission.
This transmission is all electronically controlled. It is controlled by the Powertrain Control Module (PCM). It is also known as a weak transmission looking for a reason to fail. I had mine fail on me and it cost $3,000 to rebuild
-GET a Small external tranny cooler and have it connected in series with the existing cooler so that the engine pumps the fluid through the original cooler first, then the auxilary cooler and then back to the transmission (PEP BOYS sell the cooler for $40.00 and will install it for you for a small fee)
-GET the fluid PUMPED OUT every 12,000 miles
-GET the fluid PUMPED OUT and have the filter changed every 24,000 miles.

3. GEM
The generic Control Module (GEM)is the secon computer in your car. It is mounted in the dashboard behind the radio. It controls the Inside Lights, Windows, Wipers AND TRANSFER CASE (believe it or not) among other things. It is about $250 an is also very easy to change. And is aslo notorious for going bad
4. BORG-WARNER 44-05 transfer case
The transfer case is electronically controlled by the Generic Control Module (GEM). It has a INTERNAL clutch that is controlled by a solenoid (Electric Clutch). it also has 3 speed sensors mounted to it (one is the main vehicle speed sensor and is not used by the vehicle in controlling the 4wd system) two of the speed sensors are very important for 4wd operation. They are called HALL sensors and one measures front driveshaft speed the other measures rear driveshaft speed. The transfer case also has a ELECTRIC SHIFT MOTOR the is used to preform a mechanical shift of the transfer case from it's high gear range to it's low gear range.
In 2wd mode the GEM DISENGAGES the Clutch and the front axle (through the VACUUM SHIFT MOTOR).
In 4wd-AUTO the GEM engages the front axle and SLIGHTLY engages the electric clutch in the transfer case to send power to the front driveshaft (but still allow for slip so that your drivetrain isn't stressed if you are turning). It also starts reading the HALL sensors. If the rear driveshaft is spinning much faster than the front the GEM increases power to the electric clutch until the driveshafts are going close to the same speed. (NOTE THAT THERE IS NO MECHANICAL SHIFT IN THE TRANSFER CASE WHEN YOU GO FROM 2WD to 4WD-AUTO)
In 4wd-low the ELECTRIC SHIFT MOTOR shift the transfer case into low gear range (2.88:1) and fully engages the ELECTRIC CLUTCH.
This is what I learned about the transfer case:
-CHANGE THE FLUID EVERY 24,000 Miles (it only takes 1.5 quarts of mercon transmission fluid. Make sure you take the fill plugh off before you take the drain plug off in case you can't get the drain plug off you still have fluid in the transfer case)
-If you have a problem with the 4wd high mode it is probable one of the HALL sensors going bad (the rear one took me 5 minutes to change. The fron one requires removing the ELECTRIC SHIFT MOTOR to access)
-Keep the car in 2WD mode unless you need the 4wd don't waste your electric clutch on dry pavement.
-don't shift into 4wd-auto if you are going above 30mph. I have heard of people damaging the front axle if the axle doesn't engage properly
-once a month, on wet roads drive for about a mile in 4wd-auto to lubricate your front axle fully.
- TEST YOUR 4WD-LOW SOMEWHERE NEAR YOUR HOME THE FIRST TIME (You wouldn't want to find out that the shift motor got stuck in low gear in the middle of the desert would you?)
5. REAR AXLE
Most of the rear axles in '95 were the limited slip type. They take 80w90 hypoid gear oil and require 2oz of a special ford additive for the limited slip axles.
CHANGE YOUR AXLE OIL EVERY 50,000 miles
CHECK THE CONDITION OF THE OIL EVERY YEAR
MAKE SURE THE BREATHER TUBE ON THE AXLE DOESN'T GET BRITTLE AND BREAK
6. FRONT AXLE-DANA 35IFS
they are not limites slip (if you get stuck only one front wheel will spin)
the axle is supposed to tak a synthetic gear oil, But even the dealers use the same oil as the back.
CHANGE YOUR AXLE OIL EVERY 50,000 miles
CHECK THE CONDITION OF THE OIL EVERY YEAR
MAKE SURE THE BREATHER TUBE ON THE AXLE DOESN'T GET BRITTLE AND BREAK
the control module you found the tubes disconnected from is called the ELECTRONIC VACUUM CONTROL VALVE. The reason two line are going to your vacuum shift motor on the axle is to because the axle has to be DRIVEN ENGAGED and DRIVEN DISENGAGED. If the designers had only one line to DRIVE IT ENGAGED the they wouldn't have any way to disengage the axle once it was engaged.
As far as why the lines were off, I think it is stupid to pull both lines off. If you want the front axle to stay disengaged the you should leave the disengage line plugged in. your lucky the axle didn't get stuck haflway engaged and halfway disengaged. Just watch it carefully for the fisrt few days
Finally, If you are in 2wd the front shaft will still spin slowly because the transmission fluid in the transfer case still cause some small amount of energy to get to the front driveshaft.

I learned all of this because I thought my local Ford dealer was trying to rip me off. AND I WAS RIGHT.
I'm glad I could help you out. Get all your fluids changed