Well, problem solved -- for now ... One of the solenoids was not working propperly. Let see how it all goes from now...

 

captain chuck have you replaced the sensor located on the passenger side fender under the hood it has vacuum lines and wires attached it runs around $111.00 according to the dealer if you can find one at the junk yard you might get luckey one of the sensors has a blue dot the other one has a yellow dot on it and they both set side by side

 

This one?



I changed this one and problem solved

 

I have a 03 montero limited (Flashing yellow light Center diff) I did replaced the frontwheel engagement solenoid (that control the freewheel clutch assembly), this is the first thing I would check before you guys attempt to touch any other sensors by the transfer case. part # MR430381 dealers from southern california prices range $135-$145. . after I change this solenoid, the freewheel clutch assembly error symptom never came back. Im not a mechanic but did bought the 2003-2006 repair manual on disc found in ebay $17. good source of reference.

 

Hello my friend I'm new to your amazing website I'm from Israel and enthusiasts Mitsubishi significant שלום.