2004 4Runner 4LO light on and not engaged

[jed55210]

I have a 2004 4Runner with the v8. Every morning it makes a horrible clanking clatter noise while driving until it warms up. At the same time, the "4LO" lights comes on, but it is not engaged in 4LO. Any ideas to what this might be??? I'm at a loss

 

[jed55210]

Come on people, somebody has to have had a similar issue