The service 4x4 came on,I pushed the 4 hi button and all it does is blink,checked both fuses and they are good,any ideas?

Check out this GM Tech Service bulliten...
http://www.alldata.com/tsb/General-Motors/1141372800000_1142496000000_05-04-21-003A/31.html

When the service 4x4 lights up the contol module will not allow any more shifts during the ignition cycle with thre fault. You need to get the codes outof the module and detrermine the cause.The 03 model years had a lot of problems with the sensor inside the actuator(motor) on the side of the transfer. But, don't start to guess without the right data.