I read many of the 4x4 answers but I was hoping someone might help me zero in on the cause if they recognize these unique symptoms with engagement of the 4x4.

2004 XL7 V6 auto: For the past year, the 4x4 has been touchy to get it to engage. The vehicle must be dead straight and traveling slightly uphill.  Anything level or downhill is impossible to work. In those cases, the 4x4 lights on the dash just blink until you turn off the vehicle and restart.  Prior to this, everything worked just fine and I had never had any problems.  Now, even being uphill doesn't engage anymore.

Any ideas to narrow down the culprit???  Thanks in advance.

Look for a leak in your air line. Most liking short rubber hose from the diff to the frame.

Thanks for that. 

I had a Blazer with similar problems and prefer to find it myself if possible.  It was a hose that had come off on the Blazer but PITA to locate.  It sounds like a leak on the XL7 but wanted some help and you've been great.

Any other suggestions are appreciated.