Does this wire connect to something?

[redwing4900]

My most recent issue with my 98 Yukon is that the front drive shaft at various times locks like it's in 4wheel drive. I get no indication that I'm in 4wheel but the drive shaft won't turn freely and then for no apparent reason it will turn like it should. I'm getting a pretty bad clunk out of the front end which i couldn't explain until today. It turns out that it's from the frontdrive shaft engaging. I do not get the clunk from take off when I'm in 4wd. I was thinking maybe transfer case motor but as i was poking around i found this Bare wire. Does it connect to anything? Ground maybe? Also how do i switch my transfer case into neutral? I can't seem to find that nugget of info in my manual. Thank you

 

[Fless]

Automatic TC?

 

[redwing4900]

I tried that method to put the tc in neutral worked perfectly. Thanks
Does anyone have a good schematic coming from the transfer case showing the yellow and purple wire? I tested the bare wire it has .11-.26 volts when the key is on and switching to 4 hi and lo; and zero ohms when tested to ground. I was set to ground it but there is that small amount of voltage.

 

[redwing4900]

I was able to find a good wiring diagram but what I can’t find is the transfer case relay? Is there such a thing the drawing says that it’s on the right side of the fire wall but I don’t see anything like that unless it’s inside?
I’m thinking My problem Is either the transfer case relay or motor. I do not get any indication that I’m in 4hi when it switches on randomly...is this normal for the motor when it’s bad? The motor will shift At the transfer case and front axle when I push the button to engage and they also disengage and I can Then freely spin the axle. I have removed the front drive shaft to get ready to remove the tc motor and shoot the wires. Does anyone have some wisdom on this part when it goes bad?