My friend has a 98 4x4 Explorer and the 4 wheel drive and 4x4 low lights are flashing on the dash.Also the 4 wheel drive does not engage when turning the dial, but has the traction control and works if the tires slip.Anyone have any ideas?

 

Transfer case shift motors fail a lot. You can try (carefully...don't get yourself killed doing this, and if you do, tell your kin not to sue me...I'm broke and ain't got no money anyways) having someone hold the truck in gear with the 4WD engaged, then shimming under and beating on the shift motor with a hammer. If the light is flashing, it'll store codes too, get 'em checked.

 

My 05 Sport Trac did that. The speedo even dropped thinking it was in 4-Low. Dealer replaced the Cluster and a few sensors under warranty.

 

I had a 94 do this. two possible things have gone wrong.

1. the switch is broke (very unlikely)
2. the electric contacts in the shift motor have gotten dirty.

#2 is almost always the case. best awnser is to remove the electric shift motor and clean the contacts with electric parts cleaner.