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Same problem on 04 tahoe Im having the exact same problem, when i am driving down the road in 2wd it seems to kick out of gear but i can put it into 4w auto and it will work fine. Been looking around to see what the issue may be. Any ideas would be greatly appreciated.

Solution?? Hey dragnfly I was wondering if you ever came up with a solution, I am having the same problem on my 04 tahoe. The auto4x4 works fine, but if I put it into 2wd it will slip out of gear, read your post and was wondering if you ever came up with a solution.