2003 Chevrolet Blazer 4.3L Transfer Case Noise? 4 Button

Was in 2WD today towing the boat home and this noise started. Didn't come with any vibration and the transmission shifts fine. The transfer case won't seat in 4HI or 4LO, just remains flashing despite actually moving into gear. I hear the module in the cab and the case under the trunk clunking as it does go into 4HI and 4LO just doesn't fully engage according to the display. The noise persists driving in 4WD.