What's the bid difference in the seats? I know the Denali probably has plush leather, more adjustability, blah, blah, blah, but I don't see GM mass producing 5 or 6 different foam cushions.
The auto function is a terrible idea IMHO.. The trucks equipped with the auto t-case are completely different than what most are used to. They have clutch packs in them like a transmission and/or a Limited slip differential. I would be willing to bet they are slipping and overheating causing the issue. Its not old school chain or gear driven tech.
When working with your truck and 4wd is needed, I highly recommend putting it in 4hi or 4low and leaving that auto button alone...
This is an issue in most 1/2 ton trucks that have the auto t-case.