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HELP! 4 wheel drive actuator not engaging

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I have a 2005 Silverado 3500. When I would go to turn on my 4wd the light would stay red on 2 (solid) but flash on the 4 (hi and low)- resulting in it staying in 2. I replaced the actuator- backed the truck out- was able to get it into 4 low- but it was stuck there. Took the day- did some more research. Removed the encoder motor on the transfer case- took it all apart- tested it- everything works well. Put it back on- Checked the control module under the dash- seems ok too. Also checked the fuse - which is ok. When attempting to put it in 4wd it is still just flashing (for both hi and low) but staying solid lit for 2. I rebuilt the old actuator and attempted to see if that was the problem- however nothing is activating the actuator.....any ideas? Also redid the ground- disconnected batteries...simple stuff. Thanks in advance! 

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