Start out by saying I'm a tech and work with a master tech who used to work on fords but even he is at a loss.
I have a 97 4.6 with electric 4wd. When I got the truck the 4wd worked fine and the previous owner had just replaced the transfer case motor had paperwork for the work done and I visually checked it was indeed a fresh motor. Slowly over about a year now it got more temperamental, it would only come in and out of 4wd when first starting the truck. Wasn't a big deal for what I use the truck for. Now it got to the point where it wouldn't work at all and then when I started to mess with it at the shop I got it to go into 4wd but then it was stuck. The GEM was throwing a code for a contact plate circuit error. Thought maybe the motor he replaced with was a bum one so got a new one and same issue. Noticed some corrosion on the connector and long story short thought we fixed it because after fixing the connector it worked perfectly and instantly. But then less than 30 minutes later after parking the truck and trying again went back to doing the same thing. Went halfway into 4h and no light then went to 4 low and is now stuck in 4 low. It's not the vacuum seals for the front because those actually in gauge and come out with the switch position so it will let go of the front wheels but the transfer case will stay in 4wd.

Tldr is 4wd sticks and halfway disengage then won't come out. I'm really about ready to get a whole new transfer case at this point.

I've thought about the relay up by the speedo (also I checked all the cpo relays) but the master tech who used to work at Ford said it's hardly ever that unless is a constant issue. And you can audibly hear the relay working and the GEM keeps throwing the contact plate circuit code (even with new motor (