Originally Posted by AJeep
this just brought up another question.
Does the emergency drive engage or disengage by the vacuum being on or off?
Kinda, it the vacuum pulls on either side of a rod on the transfer case. It pulls it in one direction to lock it in e-drive, and pulls in the other direction to pull it out of e-drive. Once it is in one mode or the other, the vacuum is no longer needed to hold it into position. While the switch could be leaky, I'd say it's more likely that a hose is loose behind the switch.
A brief description: A vacuum hose runs from the intake manifold (providing vacum) to the switch. Two hoses then run from the switch to the transfer case, one to engage e-drive and one to disengage e-drive. They attach to the transfer case on the upper right side. When you turn the e-drive knob, vacuum switches from one hose to the other.