Originally Posted by Staletuna

Thanks for the input guys.
I will check the battery/alternator I know the running voltage was 14.4
and look at the ABS sensors again also.

--Update and some history--

On the way home last night when the 4x4 light came on I also got a ding and the message center briefly displayed DSC 4x4 inactive. It did that about 5 times then stopped. But the whole way home the light still illuminated every acceleration.
On the way into work today I didn't get the DSC 4x4 Inactive warning and no new codes stored.

I did get great receipts when I bought this truck (one of the reasons I did buy it) a BMW/Mercedes indy shop did most of the previous owners work.

I'm assuming the previous owner had a similar problem looking at the receipts

The transfer case fluid and actuator gear were replaced @ 140,xxx
The Alternator, ABS computer, steering angle sensor, and all 4 wheel speed sensors were replaced @ 142,xxx.
All BMW part # on the receipts.

I was watching the T/C actuator graph on the way to work today. It hangs out around 120-122 degrees then goes up to 155 as I accelerate, then when the light comes on it backs off to about 10degrees.
Does anybody know how much that should move during normal operation?
I wonder if the clutch could be worn...