4wd light is flickering on and off

if you fix everything mentioned above and it still doesn't work right, check the ground wires that are hooked to the driver side inner fender (right between the ECU and brake master cyl, on a 91-01 at least) with a self tapper. If you have plenty of uptravel and your tire scuffs the paint off the inner fender there, there is a good chance it has knocked the screw loose. Those grounds run a few things, including the TCU, HVAC blower, and transfer case indicator lights, at least on my 96.
 
disco axles were only used with the 231 right? I always forget. I think they used disco axles along with the older 231 cases that locked front/rear driveshafts together with the TC in neutral, but not entirely sure.

edit: I've always thought it would be kinda neat to use an older vac disco axle to effectively get 2hi, 4hi part time, 4lo, and 2lo out of a 231 case. Would obviously only work with no front diff locker or a selectable front locker.
 
ok so just to make sure i can take the lines that go to my axle now cap the lines off and then engage the fork so itll be in 4wd when activated by the lever am i right?

si,senor-- as long as the axle is solid (or has a manual disconnect attached), you will get the correct lights at the correct times with that simple vacuum hose connection.
 
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