You could also cap off the line from the vacuum chamber to the vacuum solenoid for the hubs.

 

What would cause the electrical side to not function.

The mechanical side is fine.

 

Bad connection at one of the connectors.
Broken wire.
Short to ground.
Bad shift motor.
Bad communication module on the T case. (the bigger plug on driver side of T case).
Bad 4x4 switch.
Bad VSM module (I think that is what your 03 has).
Bad shift relays.

 

The switch functions. I can see the switch function normally with the scanner.

The connections are good. I checked them and added a little dielectric grease.

If the Module sees a bad Vacuum switch it will still engage the 4x?
To me that's a bad input, so the 4x module would say to not engage the Tcase. I guess that's what I'm asking. If that's not the case, then I need to start pin testing everything.

 

I don't know about see a bad vacuum switch, but I can tell you when my vacuum switch was bad the ESOF would still manipulate the transfer case and still signal the vacuum switch, the switch was just unresponsive.

I think if your ESOF won't engage the transfer case there is something else going on. Are you able to change gears in the transfer case manually from underneath?

EDIT: Just saw your more detailed post about the switch. The switch won't know the difference between a connection to the hubs and just being capped off so just make sure it's capped off. When my wife gets back I can try unplugging my switch and see if the ESOF will still engage the transfer case or not. If it will then your easy fix is likely to just unplug the thing.

 

I tried unplugging it. I stopped by a U-pull yard by my house and grabbed 2 of the solenoids and they both test bad, and it won't work.

I found another post now that a guy had that code, he cleaned the connectors at the relays (mine are both perfect) and his started working. So I'm not sure what to think on that side.

I also found a wiring diagram now, so I won't be poking around under there blind trying to guess what I'm testing.

 

Test the relays.

 

my t case engages (and others i have troubleshot) whether the vacuum is working or not. I am speaking from real world experience. The front driveshaft will spin, but the wheels are not driven because the hubs are unlocked. This is why people can put manual warn hubs on their trucks and the system will still work.

I added the shift relays to the above list of possibilities.

 

I plan to do that once the wife gets home. From what I could do in a parking lot they weren't being functioned by the system (wife flipped the switch while I held my hand on the relays)

I'll check and see if they have power, and signal when I get a chance in a couple hours.

 

I helped a member get his running last year, who had a bad wire at the INPUT side of one of the relays. That was down in the 7.3 forum, where I have posted a ton of info/diagrams on troubleshooting this system. It really is a simple system, and not the monster that some make it out to be.

Had another member that drove on the beach a lot. His wires turned to dust inside the insulation because of corrosion.

 

I've got manual hubs, so The entire Vacuum system could go away as far as I'm concerned... lol

I'll check the relays and see what I come up with. Hopefully it's not the electric motor on the case. I found an interesting read on another forum here:
P1876 - Transfer Case 2 wheel drive solenoid circuit failure - Diesel Forum - TheDieselStop.com

I'm not sure how relevant it is being an 05 Super Duty.. but I don't think the system changed. Skip the the last post, that gives a pretty good overview of the system... and Tells me that I got bad info when it comes to that solenoid on the fender.