I have an 03 sport and the 4wd switch has never worked right. It seems to be off by one position...when in 2wd the part time light either stays on or flickers, when in 4hi, no light, N 4Lo lights up or flickers, when in 4Lo no light... Once this summer I was in deep water 30"+ and a few days later my jeep started sputtering and running like crap. I couldn't drive more than 25! I checked the codes and I got one about low manifold vacuum and one about 4wd switch voltage??? Anyway, I thought it was something major but I removed the plug in the t case and replaced it and shazam! Everything was fine after that.
Anyone else had similar problems?
Anyone know how to adjust that switch???

sounds like you got water in the swich
The light on my TJ has not worked right in over 2 years and I dont realy care I know what gear I am in
the problem that I know that some folks had with the "full time" case is that it gets out of adjustment and will hang up and not go fully into 2wd and that causes problems if not fixed quickly or if you dont put it in full time
it sounds like your problem is electric though

It's not a big problem, just annoying. One problem that concerns me is the part where it was running all crappy. The code i was getting was for low manifold vacuum. It seems that the engineers use manifold vacuum to tell the computer when the t case is in low range. Mainly because the shift points change in 4L. This was an explanation from my local dealer shop guy... Question, what happens when you're out on the trail and the switch goes out completely??? What else is this switch tied in to???

No idea why it ran bad. There is no vacuum lines or anything of that sort that go to the T-case. The switch tells the computer if it is in 4-low or not. I actually was experimenting and disconnected the switch. Didn't make a difference in the way it ran at all.

Hmm, strange. When i was having the problem, i disconnected the switch which allowed me to start the engine again. it ran ok for about 2 minutes then same thing, sputter, pop, bang, like an old carb getting no gas. After a few cycles of connect and disconnect, i guess whatever water was in it came out. I've been in deep wter since then and haven't had a problem.