4WD shifting problem 98 GMC Jimmy

6 cylinder, automatic, 3 button electronic control
Car currently not driveable in two wheel high.

For several months once in a while when driving between 50 and 60 a heavy whirring (gears not fully engaged, but trying) sound would start and could be heard from the front passenger side, I would slow down to about 40 or less then press the 4HI button, transmission would shift whirring would go away, then I would press the 2HI switch and go on my way. Problem slowly became more frequent.
now the car will shift into 2HI, but there is a continous light whirring sound (gears skimming each other), press the 4HI button whirring sound goes away, but there is a defenite clunk has the gears engage.
If it helps,
The diaghram valve under the battery has a light coating of oil on it unlike everything else around it which is dry and dusty. Engine off the valve is relaxed and out, engine on the valve is sucked in and tight, I had someone in the car push the drive select buttons and change gears but I didn't see the diaghram move? Ideas please