tow/haul is intermittent

[Jeff22]

Trying to figure out whats going on here. When I use tow mode it will randomly shift on and off. Meaning the transmission will upshift then shift right back down. Sometimes immediately and sometimes it waits a few seconds. The strange part is that the tow light never turns off. Ideas anyone? Sounds like a loose connection to me but I wouldnt have a clue where to start looking. I have heard of similar problems with the wire in the steering column but the light wouldnt be working if that were the case right?
This is a 2007 classic 2500hd 4x4

[DmaxMaverick]

The switch on the column is intermittent, and only indicates to the TCM the mode you wish, in the cycle of options (Normal, T/H, ODLO). If it were a problem with the switch or harness, the IP lamp would cycle as well, as you suspect.

The TCM programming is designed to prevent "gear hunting", which sounds like what you describe. It can, however, "hunt" a time or two under some circumstances, such as a "new" (to the TCM) environment, like a different load or temp range it normally "sees". If it does it once or twice, then operates normally, this will be considered "normal". If it's continuous, then there's a problem with the TCM, tranny or sensor. If there's no DTC (MIL on), then you'll have to watch the real time data at the time of the problem, which requires a Tech II or a scanner capable of reading the TCM. Something as simple as bad temp sensor data can cause this. Possible reasons may include a bad sensor, bad communication (dirty/poor electrical connection), or just a "dead zone" caused by changing of the seasons (actual data received is not what it expects, according to other sensory data).

Overdue service (external ATF filter, low ATF, used-up ATF) can also cause strange issues.