OK; problem solved; deal made. Thanks to all. Got good idea's from everybody. Solution was in the computer; got answer from retired Chevy/GM engineer. If anybodys cares here it is. Larry
The part number you should aim for is 12590220.
The dealer is a goof, and isn't reading their TSBs. 2002 TCCMs are HORRIBLY unreliable.
#02-04-21-006E: Inoperative 4WD/AWD Lamps, Inoperative 4WD/AWD System, DTC C0550 Set No Communication with TCCM (Reprogram Transfer Case Control Module) - (Jul 20, 2006)
Subject: Inoperative 4WD/AWD Lamps, Inoperative 4WD/AWD System, DTC C0550 Set, No Communication with TCCM (Reprogram Transfer Case Control Module)
Models: 2004 Buick Rainier
2002-2004 Chevrolet TrailBlazer
, TrailBlazer EXT
2003-2004 Chevrolet Avalanche, Silverado, Suburban, Tahoe
2002-2004 GMC Envoy, Envoy XL
2003-2004 GMC Sierra, Yukon, Yukon XL
2004 GMC Envoy XUV
2002-2004 Oldsmobile Bravada
with Electronic Shift or Active Transfer Case (RPOs NP1, NP4 or NP8)
This bulletin is being revised to add Subject information and change the labor operation. This bulletin cancels and supersedes Bulletin Number 03-04-21-006. Please discard Corporate Bulletin Numbers 02-04-21-006D and 03-04-21-006 (Section 04 -- Driveline/Axle).
Condition
Some customers may comment that the 4WD/AWD indicator lights on the selector switch do not work, or the 4WD/AWD system may be inoperative and/or the service 4WD light is illuminated. The condition is typically intermittent and always occurs at key-up. Upon investigation, the technician may find DTC C0550 set.
Cause
The Transfer Case Control Module (TCCM) has not received the wake-up call during key-up and has remained in the "sleep mode".
When the TCCM is in the "sleep mode", it will not communicate with the class II bus or the Tech 2®.
Correction
1. Try to communicate with the TCCM. If no communication, go to step 2. If communication is possible, go to step 5.
2. Remove the underhood (ATCM or TREC) TCCM fuse.
3. Wait 30 seconds.
4. Reinstall the fuse. The module should "wake up" and communicate with the Tech 2®.
5. Check for codes in the TCCM. If a C0550 is found current or in history with or without other codes, replace the module and go to step 6.
6. Reprogram the TCCM with the latest TIS software using normal SPS procedures.
7. Verify operation and that no codes are present.
Important: For the 2002 model year, the TCCM must be replaced and reprogrammed.
Even if the encoder motor is bad on the transfer case, you can't tell until you get the TCCM communicating again and controlling the system. And if you need a new one, they're under $200 on Ebay. Just make sure you get the proper one (5-pin or 7-pin connector) and I forget which one the 2002 needs. I think the 5-pin. Until the vehicle has a working TCCM, no tech tool can POSSIBLY determine the encoder motor has an issue because the encoder motor can't be tested without the TCCM running well.
Unless the encoder motor has a big hammer hit in the side of it, and they blame THAT on the TCCM.