How bad did I mess up???
 

I have a '99 Expedition Eddie Bauer. After changing everything else I finally realized the gear slipping noise I had every time I got up to speed or when pulling something was my Transfer Case. Being thrifty I went to a Pick-a-part salvage yard and took one out of a '97 Expedition and painstakingly replaced it with my worn out one. Everything seemed great, no more pop or slip...EXCEPT now it will not go out of 4WD. It switches from 4HI to 4Low real nice, but when trying to take it back to AWD it doesn't switch and the 4X4 light flashes in the dash. Is there something I still need to do? Or is the 97 T-Case not compatible with the '99 Expedition? I NEED HELP!!!

Did you remember to plug in both the front and rear speed sensors?

I did plug in the large wiring harness. There was another wire clip that I separated when taking my T-case out and I re-plugged when I installed the new (used) one. But it didn't actually go to the T-case it went from the exhaust to the transmission. I could see another wire harness on the '97 t-case but did not have a corresponding wire to put there.

Well, it sounds like the two weren't totally compatible if wiring doesn't match up. Are you sure you have a wire going from your exhaust to the tranny? Nothing that I'm aware of would connect the two.
You might have confused the electronics, especially if you have a dangling harness.

97's and 98's have a 2WD setting, 99-02 only have 4AWD. I believe you installed a 4406 Borg Warner and needed a 4406 TOD. Not compatible.

I think you're right. Well....I'm bettin I can make the swap in 1/4 of the time now that I have already done it once. That's still not saying much seeing that it took me all day and into the late..late night to do it last time. : /

I'll check back in and let you know how it goes. Thank you!!!