The grey plug is the diff lock position switch. The black one is the diff lock solenoid.
I found a better scanner (snap on) and read the codes. It threw a C1187.
"ABS Diff lock controller no good"
I measured the solenoid sensor and it read just under 4 Ohms which appears normal from the service manual.
The position switch is suspect now. Again, if I unplug it, I get no dash lights.
What's strange is that if there was a damaged wire, bad ABS sensor, or broken connector somewhere under the truck, why does
unplugging the position switch connector on the diff change the dash light behaviour?
I plugged it back in and started the engine.
No dash lights. (Maybe they got cleared, but would likely come back if I drove around the block)
Anyway, with everything plugged in properly, and no dash lights sitting in my driveway, I cannot lock the diff in 4Lo.
The truck goes into 4Lo no problem, but after hitting the diff lock button, the diff light just blinks repeatedly.
So something could be wrong with the position switch in the diff, or it is the controller. (The controller is behind the back seat near the spare tire jack tools)
I might try to measure some more connections before I'm forced to take it in to my Indy shop.