there's a hell of a lot of info on this on pajeroclub.com.au forums too. to manually override the diff disengagement thing you just swap a couple of hoses over apparently. transfer case still functions, just your front end wont 'freewheel' the one that tends to fail is the one that 'holds' the thing in 2wd postition.
Unless you physically break something steel then you will always get home as the 4WD at the front diff is default mode, it taken vacuum to hold it in 2WD.
When the key is off it is in 4WD (at the front diff)
There are no front hubs to break or disengage - they are always engaged and cannot be disengages short of removing 6 bolts and the drive flange.
Don't worry about the system, it is pretty fool proof if used frequently and works well.
that link you posted is a good one to diagnose why they might be flashing if you have flashing top 4WD lights. Chances of the ECU crapping out are slim.
I ahve had to replace one vacuum solinoid (wouldn't go into 2WD at front diff - flashing lights) and one spring on the actual disconnect at the diff from spending so much time in the water & mud, the vacuum wasn't strong enough.