This is because its not fully shifting back into 2 Hi. make sure vehicle is in neutral and idling, push the 4 Low button listen for a shifting sound or whirring noise. then push 2 Hi button. it flashes while it is attempting to shift you should hear a shifting clunk or whirring noise, then the light will stay lit. after shifting from 2 wheel drive to 4 wheel drive shift into reverse before selecting drive on the column. the rpm going so high is because your vehicle is still in 4 wheel drive. the low gearing results in high rpm. if it does not shift into 2 wheel drive : there is a shift actuator on the transfer case, check the cable connected to it. this cable is connected to the vacuum control pump deal that controls you cruise control. this pump is located directly under the battery box. the plate the battery sits on must be removed in order to see it. check any wiring there and check for vacuum leaks in the lines connected to it . this pump actually pulls on the cable going to the shift actuator. check that the cable is attached and the baffle on the pump is moving. you can manually pull the cable by hand, while having an assistant operate the buttons inside the cab. this will release the actuator in the transfer case allowing the transfer case to shift properly. basically its a locking mechanism, locking the transfer case in the selected gear range. it must actuate in order to complete the shift