My 4WD is staying on all the time and I need some assistance in diagnosing the problem..

The 4WD indicator will remain on whether I have the transfer case in 2H, 4H, N or 4L.

I can hear the air pump kicking in every time I turn the ignition on.

In 2H, the 4WD indicator will remain on, but the front diff will not engage. The only way to turn off the pump is to unplug it.

I just recently did some work on my vehicle (with the winch mount) and I had the air pump off the vehicle for a while. It' only after I installed everything I noticed this problem. I played around the the wiring harness, looking for any possible shorts, but could not see any.

In 4H or 4L, the 4WD will function perfectly..

For all of the symptoms mentioned to be possible you'd have to have a defective 4WD controller or ECU (depending on the year), which I kind of doubt.

Do you have access to the FSM?  It has a troubleshooting chart in section 7E that will assist in diagnosing the problem - which I suspect may be a defective switch or possible pinched wire causing the controller to think 4WD is selected even when it's not.

If you need the chart let me know, and also the year of your vehicle.

FSM like fordem mentioned will be very helpful.  There's two switches on the transfer case that tell the ECU/Pump/Dash Light to do their thing.  One for 4H and one for 4L.  I remember looking at the wiring diagram a while back when I had some issues and I'm pretty sure that the pneumatic actuator is actually disengaged and then re-engaged as you shift from 4H (through neutral) and into 4L so that explains the two switches. 

Removal and testing of the switches isn't too hard however I remember having to use a "faucet socket wrench" to get the 4H switch out like these:  http://www.acehardware.com/product/index.jsp?productId=1273236&CAWELAID=362171807

It was the only thing I had that could remove it without cutting the wires coming out of the end of it.  The right size oxygen sensor removal tool would work too but you should be able to find these in the plumbing sections of most hardware stores.  It think it was 19mm or 3/4".

There is only one switch in the TC for 4WD in 98-05.  The circuit is here, in my 2WDLo mod:

http://bbs.zuwharrie.com/content?topic=38056.0

Sounds to me like the switch is seized in 4WD position, or there is a short to ground on the Black/orange stripe wire.

Let me know if I am looking in the wrong section of the FSM..

Under Transmission SQ416E, Section 7E, there is just information relating to the front differential.

Section 7D relates to the 4WD Transfer case and there I see mention of the 4WD switches you guys speak of.

Also in the electricals section, I am seeing the 4WD diagram as IanL posted on page 8A-7-32.

I am going to check the 4WD switch and see if there are any shorts on the B/Or wire, assuming I find them..

The 4WD control system is in Section 7E - the one which covers the front differential, the part of your truck that has the air pump and air actuated freewheel mechanism, the part that you seem to be having trouble with.

I'd also suggest that you make sure you're using the correct manual for your vehicle - the diagram that IanL posted is for the '98~'00 years, the years with the separate 4WD controller - I believe yours is the later model - and also that you might like to unplug the ECU before doing any continuity tests on the associated wiring.

Looking under my dash, I am seeing a black box whose wires match those in the diagram posted by IanL. The box is about 2.25" wide, 3" long and 1" deep. It has 6 wires in the harness connected to it.

I am looking at the SQ 416/420/625, 1998 - 2005, Electrical Diagrams 1 manual.

The B/W wire is getting a 12V signal with the ignition on..

With the black box disconnected, the 4WD is not coming on with the ignition on.

With the 4WD module connected and ignition on, I am getting 12V on the pink wire, 12V on the red wire.

12V between either the P or R wire connected to the Black wire.

I am getting 0.83V going to the Or/B wire (which according to the diagram leads to the combination meter, so I assume that's the 4WD display light. Also, the light fluctuates briefly every few seconds and so those the voltage reading)

I am also getting 0V going to the Black / Orange wire. Even if I switch the transfer case into 4H, it remains at 0V.. Could that represent a short?

Looking back at the diagram, is the B/Or wire supposed to be grounded to activate the 4wd?

If the black/orange wire has a constant 0V regardless of the position of the transfer case lever it indicates one of the following conditions ...

1 - the 4WD switch is defective
2 - the black/orange wire is shorted to chassis ground
3 - something in the transfer case is holding the switch in the on position.

The troubleshooting chart (Section 7E, page 6) tells you where to check, what to expect, and where to look if the readings are not as expected.

I suggest you disconnect the switch harness from the TC and check the voltage on the B/Or again, with the ignition on.  If it's still 0V you have a short to ground, if not the problem is the switch.

I suggest you disconnect the switch harness from the TC and check the voltage on the B/Or again, with the ignition on.  If it's still 0V you have a short to ground, if not the problem is the switch.

What is TC?

With the 4WD Module disconnected and ignition on, I am getting a constant 12V on the B/W and Or/B wires. Every other wire reads 0V, including the B/Or and irregardless of where I place the transfer case..

Right, the B/Or wire is definitely grounded. I placed my multimeter leads across the B/W wire (a constant 12V) and the B/Or and got a proper 12V reading..

So I am guessing the B/Or wire needs to be grounded to activate the 4WD..

If that is the case, I am thinking I can run an external bypass switch so that way I can access 2WDLo (without having the air pump running all the time)..

I have manual hubs up front, but it would be an additional bonus to deactivate the air pump while in 4L.

If the black/orange wire has a constant 0V regardless of the position of the transfer case lever it indicates one of the following conditions ...

1 - the 4WD switch is defective
2 - the black/orange wire is shorted to chassis ground
3 - something in the transfer case is holding the switch in the on position.

The troubleshooting chart (Section 7E, page 6) tells you where to check, what to expect, and where to look if the readings are not as expected.

Do you know of anyhwere that sells those FSM manuals? I'd like to get my hands on a hard copy..

I found this set on Amazon

http://www.amazon.com/Suzuki-Vitara-Factory-Service-Manuals/dp/B000XZBUO2/ref=sr_1_3?ie=UTF8&qid=1292508241&sr=8-3

They only have 1 used copy at $90USD.. worth it?

My digital copy of the manual is on my other PC, will report back when I check out the troubleshooting chart on page 6..

First - TC is transfer case.

Second - You're looking at the diagram - whether it's the one from the link than IanL provided or the one from the "digital copy" on your PC - they both show the same thing - that the 4WD switch, when in the 4WD position switches the black/orange wire to ground, so grounding the black/orange wire activates the front differential freewheel clutch.

To activate 4WD you need to activate the front differential AND shift the transfer case.

Third - USD$90 is cheap for a hardcopy version of the manual, but, you'd need to verify that one matches your vehicle, and the full set is four manuals, the two shown there plus two more that cover the wiring and the teardown of the differentials, transmissions & transfercase,

Have you considered printing the "digital copy" that you have?  It's a pdf file and should be as simple as clicking the print button in the upper left of the screen.  I usually just print the pages I need for any given task.