96 Tahoe 4wd not working

On my way home tonight in my 96 Tahoe I looked down at the dash and my 2wd light was not lit as a matter of fact none of the lights on my 4wd switches were lit. I pressed the 2wd button and got nothing I then pressed the 4wd button and still got nothing not even a relay click. I then stopped and put the truck in neutral and pressed the 4Hi button and both the 4Hi and Lo lights blinked simultaneously about 4 or 5 times and then went out. I then pressed the 2wd and the light came on. While at a stop sign I then pressed the 4hi button and everything went out again. When I got home I put it in neutral again and pressed 4hi and got nothing. I then pressed 4lo and it engaged. But I still can't get anything out of 4hi. Please HELP!!

perform this operation and report back please:

Displaying Diagnostic Trouble Codes

1. Install jumper wire between DLC terminal 13 and ground, Fig. 25 . The DLC is located under the lefthand side of the instrument panel, right of the steering column.
2. Turn ignition switch to On position.
3. Wait three seconds, then observe transfer case switch status lamps.

Reading Diagnostic Trouble Codes
The transfer case status lamps will flash to indicate the DTC's stored in memory. If only one DTC is stored in memory, that DTC flashes repeatedly with a three second delay between flash sequences. If more than one DTC is stored in memory, the first DTC flashes once, then the next code is flashed. This sequence continues to flash until the jumper wire is disconnected.

I am getting 2 flashes

That is what I figured. When the encoder assy on the shift motor gives errors on it's current shift position it goes into it limp mode and locks out 4hi dileberately. Disconnect the six way plug from the encoder and follow the test below. Start on step 2 and if you end up on step 3 and answering yes that confirms the shift motor assy needs to be replaced. If not we will tackcle it further.
The motor assy is located on the left side front structure of the t-case. 6-way connector facing righton bottom of unit, motor connector facing left.

Right when you are ready to take the motor out pull fuses #2 & #4 and reinsert them after. This will wipe out the lock out function and after your done start enigine and try a few shifts.

Could this be a erratic problem I started my truck today and it was working fine and then it went out again after I stopped and restarted

Yes but it will get worse overtime it is sort of a continous random failure. That is why the TransferCaseControlModule runs an internal math equation measuring the amount of errors to justify the lockout. The TCCM ia attempting to compensate for the occasional goof of the driver or in the t-case. If you got the code trust me the tccm has really tried to ensure the encoder was not at fault and it could not do it.

If you follow the chart and it says replace it do so or this lockout will continue to happen.