So do they just not strip out on facelift models?

I don't think the inactive light has anything to do with it but who knows. I think I have a voltage regulator issue in my case but it is odd we're experiencing the same thing.
You should pull your tcase motor (DONT UNPLUG THE SENSOR - UNSCREW IT FROM THE MOTOR - YOU WILL HAVE TO CODE OTHERWISE) and take it apart to check your gear. When my actuator failed the first time I had 46 stored codes and the light came on and didn't go off. That's not the case now.

When I had the stripped gears, I still do actually, they are just 180 degrees on the other side, the light would turn on and off all the time. But I heard it grind when shutting off.

I plan on it, I just haven't had any time. The light keeps coming on and going off so I'm not convinced it's the transfer case. I need to find someone to read the codes so I can figure out exactly what's going on.

Just wanted to update this thread:
After a few days of reading, researching, and investigating I decided that I would throw some parts at the problem and replaced my alternator with a brand new Valeo Unit. So far, the car no longer fluctuated occasionally at idle, the Dynavin hasn't throw an error code like it was occasionally doing, and the 4x4 light has not come on.

I am crossing my fingers that my gut feeling was right. I'll post if anything changes.
Suggestion to those who are considering the same - I changed all of my tensioners, pulleys, and belts because I was already in there.

Good luck Marcadelic and others who think they might have the same issue.

when you changed all of the pulleys and tensioners did you notice any reduction in noises generated in the cabin of the vehicle as you drive it?

Voltage reg issue
 

Both my son and I had random lights and codes that were nonsense 4x4,abs ,trans fail safe,ect they were caused by voltage regs with high voltage spikes. I found my by using a cigarette lighter attached to a volt meter and driving with the meter on dash. I would randomly get voltage spikes(over 16 and as high as 20 v) 1 or 2 would not effect the car after 2 lights start coming on. Car would go weeks sometimes with nothing and other times you could not drive 5 miles. New regulators fixed both cars. I believe a lot of the random issues are voltage spikes. The spikes cause the control unit to throw codes that are just random. Before you start chasing codes monitor voltage for a couple of weeks and be sure you do not have voltage spikes

I don't drive it anymore so I couldn't REALLY tell you but the tensioners were in decent shape for. If I'm being honest, I don't think its any more quiet then it already was inside :dunno:. I changed them since I was already in there.

Same issue. So it seems this is common. I couldn't really find a thread documenting this exact issue in specifics so I'm glad we've created one for future users with the same issue. Marcadelic - start where Astrok did!