I believe the module is located behind the kick panel by the passenger's right foot. If that is in fact whats wrong with your system, the part will probably be hard to find/expensive. Here is some information that should help you troubleshoot it yourself.
Transfer Case, Borg Warner 1356 Electric Shift Motor Troubleshooting & Repair Source: by Dustin (link posted by Miesk5 in another topic)
I can't imagine someone charging $700 to replace it unless the part is very expensive. (I don't know the price; after 20 minutes of internet searches, I could not find it anywhere) The labor could not be more than 1/2 hour to change the module. (unless they are trying to hose you :angry: ) Since the control modules seldom go bad, I would definately confirm that the module is actually bad before shelling out that kind of money. You can get a used manual shift transfer case for a lot less ca$h, that is, of course, if you can install it yourself.
By the way, Welcome to BroncoZone > , Good luck with your problem.
Edit:
I fixed the link (it didn't work)