One problem related to axle assembly has been reported for the 2004 Chevrolet Avalanche. The most recently reported issues are listed below.
May 2006 electronic switch replaced because 4 wheel drive was engaging without being activated. Had been to dealership several times with problem and finally had them admit there was a problem. Feb 2008 front wheel drive had to be replaced as it was a possibility that it could lock up while driving. Out of warranty so I had to pay $1,300. 00 in repairs. Contacted gm exec offices and they investigated only to advise they could do nothing because the car warranty 35,000 miles had expired and car had 65,000 miles on it. I think the front end drive was damaged when the switch failed and it took time for it to fail.