I gave up and took it to the Dealer. Here is the verdict. I was told I have two problems, the first low cost one is that the Integrated Transfer Case Control module needs to be reprogramed. It is either sensing excess wear in the transfer case or due to the multiple times I disconnected the battery and did a memory purge, it has lost it's initial program parameters. The mechanic thinks it will likely be OK with just a reprogram but warned that if the transfer case (the clutch plates) are too worn, I'll need a new t-case. Second issue, Transmission Fault Reduced Traction is due to worn clutch plates in the rear differential. Apparently, the rear diff is controlled by a different module and it can not be re-calibrated and that when the self check is performed the locking control motor drives up against the end of it's range. I had long ago suspected that something was amiss with the rear locking diff because whenever I switch to rock crawl mode, I haven't seen the little orange lock light up on the 4x4 system screen. That's been missing for about 2 years and 30,000 miles.
Looks like about a $4000.00 repair bill.