Jeep 2010 Liberty - Owner Manual - Manual (Page 402)

NOTE: Steps 1 through 6 are requirements for shifting
the transfer case. If these requirements are not met prior
to depressing the NEUTRAL selection button or while
the shift attempt is in process, then all of the mode
position indicator lights will flash continuously until all
requirements are met or until the NEUTRAL button is
released.
The ignition switch must be in the ON position for a shift
to take place and for the position indicator lights to be
operable. If the ignition switch in not in the ON position,
the shift will not take place and no position indicator
lights will be on or flashing.
Flashing NEUTRAL position indicator light indicates
that shift requirements have not been met.
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