4HI (unlocked) won't engage at all. Just lots of grinding and mechanical noise. 4HI/LO LOCK will engage, but only the rear wheels get any power.
Even though te H2 is a full time 4WD, I'm guessing there's a different shaft for the 4HI mode that adjusts the power split, and this is busted. I'd bet all the problems are in the front differential, but there's obviously a secondary problem preventing the hubs from turning in 4HI/LO locked??
"Traction Control" will come up on the DIC when the rears spin as well. Otherwise, all the lights and indicators act if nothing is wrong. The loud grinding noises are the only "service" indicator.
I'd bet something broke in the front diff long before I switched to 4HI LOCK the other day once it hit the snow. Since the lights lit up normally, I was probably driving around with the rear wheels only until it got heavy and realized there was no front traction.
Hummer Roadside Assistance was unwilling to pick up the vehicle since it was in the snow (claimed none of their service providers were equipped to do so). Since the weather wasn't expected to clear, I got a break and managed to get it out in 2WD before the next batch of snow came in and dropped it at a dealer myself this afternoon.
I should find out the problem tomorrow and will post a follow up.
- Ain