OK I changed the IWE solenoid and that did the trick. There is no HI/Low indicator om the TC in ESOF trucks. The PCM is looking at the resistance through the IWE solenoid(and maybe the TC Relays) to determine the display status of the dash indicator. 4X4 High and Low are now indicating and 4X4 is still working.

BTW, if you purchase a IWE solenoid make sure they give you the right one. The parts guy tried to sell me an original design solenoid. When I told him it didn't look right and it should have a shield he went back and got the right one. Apparently the new part is related only to a TSB that wasn't coming up for my truck. Even though it is absolutely needed. And it was about $15 cheaper too!