I had trouble with my 92 300TE4 4matic unit recnetly and had to replace it.

I believe if you have trouble with the 4 matic unit the light always come on
so I would check:

Is bulb burned out?

Did someone put your car in test mode so it will only run in 2 wd?
If it's in test mode and the battery terminal has been disconnected
then reconnected the light stays off

Jim

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92 300 TE 4matic