Three problems related to transfer case have been reported for the 2004 GMC Envoy. The most recently reported issues are listed below.
The transmission started to slip, noticed it starting to have issues getting up to proper speed without slipping and trying to stall, and was told by previous owner whom I'm purchasing it from that there is a possible issue with the transfer case as well, as it engages it's 4 wheel drive without me touching it, tried to service the transmission and put fresh fluid and a new filter in to see if it would help and now it can only go as fast as 40 to 55 before it starts to slip pretty bad. I have a baby on the way due in the next couple weeks and with it slipping and dropping speed it can cause me to end up getting hit and I don't want to put mine, my child, or any of my other passengers in danger.
There is an issue with either the transfer case or transmission of my 2004 GMC Envoy xl. On several occasions, while performing slow maneuvers (20 mph or less) in and out of parking spaces or making slower right or left hand turns, the vehicle feels as if it is being held back by something, until a loud clunk is heard as if a gear disengages, and then the vehicle jumps forward. This has proven to be dangerous to me, as I have felt more than once like I hit something. The vehicle also experiences very hard downshift, into first gear as the vehicle comes to a stop. This issue first appeared on the vehicle in December 2004, and has continued intermittently through the current date date (for more than 5 separate instances).
Service 4wd light came one with 2500 miles on new 2004 GMC Envoy. Replaced actuator, then a control module on transfer case. Was told neither fixed the problem. Now told the transfer case must be replaced.