2002 Ford Expedition EB 5.4L A4WD/4WD Issue

Ok so here's the story: Wife says she was cleaning the inside of our 2002 Expy EB 5.4L V8 and she thinks our son may have messed with the switch in the cab because when she went to the store later that day, she said it was acting funny. She got 2 blocks down the road and turned around and went back home. The switch was switched to 4Lo. I tried several things to get it to switch back to 4AWD (there is no 2WD, just 4AWD, 4H and 4L). Nothing seemed to work. I tried to replaced the transfer case motor. After replacing the transfer case motor, the vehicle has some issues at first (hard to turn and very "jumpy" making sharp turns on concrete and vibrates a lot when getting up to speed) but after a couple blocks it will kick in hard and seems like it is driving normal. At first start up and drive, the front wheels kick in extremely hard and now the 4x4 light by the gauges does not stay lit like before, but now it flashes on and off. After new transfer case motor was installed and it was having these issues, I took it back home, pulled the new transfer case motor off and checked the shaft for the transfer case and it was/is still pointed to A4WD and not pointing to 4H or 4L. I am not sure what else to try. I've read on forums to replace the 4x4 module or the GEM Module (what does GEM stand for??). I'm at a loss and trying to fix myself before taking it to Ford where they are going to charge me $100 just to diagnose the issue. ANY suggestions/advise/tips will be very helpful and much appreciated. Thank you!