This type of switch is the most common to fail.
If you have one of these 4wd trucks and loose all gears or find it putting the transfer case in 4wd randomly. There is probably a problem in the transfer motor. This can be very intermittent which can make it hard to diagnose. If you loose all gears and it feels like neutral but there is a loud grinding noise when you try and put the vehicle back in park.
Try this simple trick. This may help having to tow the vehicle. I will first explain what might be happening. When you turn your ignition on. The computer checks the 4wd switch. If the encoder ring in the transfer case motor is failing, the transfer case can be placed in neutral during this process.
Try cycling the key on and off a few times and retry. The 4wd light on the switch should go to 2wd or auto instead of the neutral light. Try a few times as this will usually work to get the vehicle to move again. Sometimes the motor can fail completely and this will not work. If this works, take it to a shop to have checked and repaired as it will probably happen again.
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