I've had my 2004 TB with V8 for 3yrs and 4wd never worked. I would switch it to a4wd or 4x4 and the service light would come on. I could always get it back to 2wd, I maybe had to turn off the engine to reset. I decided to look at it this weekend. The actuator was working, I didn't hear the encoder noise though. I had tb on 4 jack stands. While tying to diagnose it, I couldn't get the 4wd light to go out. Pulling fuses, disconnect battery didn't clear the code. I went to junk yard and pulled an actuator, encoder motor and tccm. Turns out the encoder motor was the issue. Encoder motor took a little banging with a hammer to remove, I had to take apart the "new" motor to turn the splice so it aligned with the spline on the transfer case. It is easy, remove the 2 screws and pull the motor apart slowly, have to wiggle it loose. Pull it apart and set the base down and don't loose the gears inside. Rotate the assembly until the spline on the motor matches the spline on the tc. Depending on how off the splines are it shouldn't take but dozen rotations. Put motor together and the encoder motor lined right up with tc spline. Turns out my transfer case only had about 1/4qt of fluid and the front diff only had 1/8 qt. Thank goodness they never grenaded themselves. Hope this helps someone.