Transfer case keeps jumping into neutral

Does placing it in neutral put the entire drive in neutral???? Yes . Taking the vehicle to a qualified repair shop that has a factory or professional scan tool to read code's in the transfer case control module is what you should do , you probably have no clue of the complexity of these 4X4 systems . How many buttons on the switch on the instrument panel ?
The BW 4493/4494 transfer case features a 4-button shift control switch (1) located on the instrument panel. When the vehicle has the ignition key in the RUN position, the transfer case shift control module starts monitoring the transfer case shift control switch to determine if the driver desires a new mode/gear position. At a single press of the transfer case shift control switch, the lamp of the new desired position begins flashing to inform the driver that the transfer case shift control module has received the request for a new mode/gear position. The lamp continues to flash until all shifting criteria have been met and the new mode/gear position has been reached, or has been engaged. Once the new mode/gear position is fully active, the switch indicator lamp for the new position remains ON constantly.

During normal driving situations, the transfer case operates in the 4HI mode. When the 4HI mode is selected, the transfer case shift control module sends 12-volts to an electrical motor, which is the transfer case encoder motor. This motor rotates the transfer case shift detent lever shaft which moves the shift forks and range sleeve to obtain different modes/ranges.
The BW 4493/4494 transfer case has the added feature of also providing the driver with 3 manual mode/range positions:
• 4HI - 4-Wheel Drive High Open
• 4HI Lock - 4-Wheel Drive High Locked
• 4LO Lock - 4-Wheel Drive Low Locked
The driver may choose to select any of these mode/range positions while driving the vehicle. However, the transfer case will not allow a shift into or out of 4LO Lock unless the following criteria has been met:

DTC B0790 Transfer Case Neutral Indicator Circuit Malfunction
DTC B2725 ATC Mode Switch Circuit Malfunction
The mode switch circuit consists of 5 modes. The transfer case shift control module supplies a regulated 5 volts, DC to the switch through the 5-volt regulator circuit. The current travels through the resistor of the currently pressed mode button. The current is then returned to the transfer case shift control module through the switch signal circuit.
The transfer case shift control module constantly monitors this signal voltage to determine the condition of the mode switch circuit.
When each of the modes are selected they will complete a circuit through their own specific resistor while the button is pressed. The transfer case shift control module continuously monitors the switch input to determine whether the Neutral, Differential Lock, 4HI, 4HI Lock, or 4LO Lock mode was selected by the driver.

DTC C0306 Motor A or B Circuit Malfunction
The transfer case motor is a bi-directional, permanent magnet, D.C. motor. When energized, through motor control A or motor control B, the ground is provided by the opposing motor control circuit and then grounded through the transfer case shift control module ground circuit, the motor, through a series of gears, rotates a shaft which moves the mode and range forks to shift the transfer case between the following ranges:
• 4HI
• 4HI Lock
• 4LO Lock
• Neutral
This DTC detects an open, short to voltage, or short to ground in the motor control A or motor control B circuits, or an open, or short to ground inside the motor.

DTC C0327 Encoder Circuit Malfunction
DTC C0329
DTC C0359
DTC C0550

The Borg Warner (BW) model 4493/4494 NR4 transfer case is a 2-speed, full-time 4WD, transfer case. The transfer case has an external planetary type differential, which has 2 different sets of pinion gears. The planetary differential provides a 40/60 torque split front/rear full-time. This means the front and rear propeller shafts are constantly being driven for maximum traction in all conditions. A high/low planetary carrier assembly provides the high and low ranges, which is a 6-pinion gear, sun gear, and annulus gear arrangement, giving a 2.64 low range reduction ratio in the BW 4493 and a 4:1 ratio in the BW 4494.

Did the tow company put a fuse in position 37 of the glovebox fusebox? This puts the transfer case into Transfer Neutral for towing. Refer to the Owner's Manual under Emergency Information ->Vehicle Recovery->Towing for Recovery

Does the vehicle move when the car is in 2wd and in gear as all cars are permanently in 2 wd. The 4wd bit only comes into play when the transfer case is activated (servo/lever or vacuum actuator) and that brings in the front wheels . There is a condition called torque wind up when the vehicle is driven on hard surface and when you were luck enough for the 4wd to disengage it may have jumped the selector back to neutral from the pressure release on the gears . Come back with more details and find an accredited mechanic as he obviously has limited experience.

it s a long shot, but put the explorer on jack stands start engine, put in neutral GENTLy tap on shift gear on transfer case while someone is pushing handle into high. tap gas to change RPM s while working it. put into drive and do the same but put transfer case into neutral, if goes into neutral stop and put transmission into neutral than put transfer case into high. keep in mind if it works don t take it out, or you will be doing all this again. have had shift cables break have someone shift while you try to change lever position. Might be worth having it checked , transfer case is not a transmission. senser, computer, fuses, solenoid relays are just some easy fixes for this problem..

snap ring on output shaft missing or broken or just not there.

most likely the chain has streched and is slapping against the case and or jumping teeth on the gears either way it's not minor.

If your going to put the front wheels on a dolly then it won't matter whether or not the front end is in neutral,if the rear is going to be lifted then it is a good idea to remove the drive shaft,this will keep the transmission from turning.

Yes it can, just place your Transfer Case in Neutral position.
Shifting into NEUTRAL
To shift the transfer case to NEUTRAL do the following:

Make sure the vehicle is parked so that it will not roll.
Set the parking brake.
Start the vehicle or turn the ignition to RUN.
Connect the vehicle to the towing vehicle.
Put the transmission in NEUTRAL (N).
Shift the transfer case to 2HI.
Simultaneously press and hold the 2HI and 4LO buttons for 10 seconds. The red NEUTRAL light will come on when the transfer case shift to NEUTRAL is complete.
Shift the transmission to REVERSE (R) for one second, then shift the transmission to DRIVE (D) for one second, or FIRST (1) for vehicles equipped with a manual transmission.
Turn the ignition to LOCK.
Place the transmission shift lever in PARK (P), or FIRST (1) for vehicles with a manual transmission.
Release the parking brake prior to towing.
Shifting Out of NEUTRAL
To shift out of NEUTRAL:

Set the parking brake and apply the regular brake pedal.
Shift the transmission to NEUTRAL (N) and turn the ignition to RUN with the engine off.
Press the button for the desired transfer case shift position (2HI, 4HI, AUTO 4WD or 4LO).
After the transfer case has shifted out of NEUTRAL the red light will go out.
Release the parking brake.
You may start the engine and shift the transmission to the desired position.
Excessively shifting the transfer case into or out of the different modes may cause the transfer case to enter the shift protection mode. This will protect the transfer case from possible damage and will only allow the transfer case to respond to one shift per 10 seconds. The transfer case may stay in this mode for up to three minutes.
NEUTRAL: Shift the vehicle's transfer case to NEUTRAL only when towing your vehicle.
Good luck and hope this answers your question.

Change the fluid in the transfer case and retest, I recommend you use synthetic fluid, cost more works great and last nearly the life of the vehicle.

2H is neutral because only 2 wheels driven....the rear ones.....transfer case is free-spinning with non-driven front wheels now....maybe the light bulb burned out?