1999 GMC C1500 ATC fuse keeps blowing

I looked on GM service information, and for a 99 GMC K1500, there are no transfer case or 4WD fuses in the underhood fuse block. I don't even show an ATC fuse. It is somewhat rare, but not uncommon for SI to be incorrect, but it is to early to tell. Verify the info, and possibly include the last eight of the VIN. I take that back, I look on ALLDATA and it shows an ATC fuse underhood. It looks like it feeds power to the encoder motor, and the transfer case control module. You said you disconnected the switch, and actuator. By actuator, do you mean the front axle actuator, or the encoder motor on the transfer case? If you disconnected the encoder motor, just disconnect the ATC module and see if it blows, if so you have a short to ground. If it don't blow, chances are good you have a shorted encoder motor. The module is shown to be under the dash, by the steering column.

I unhooked the actuator from the front differential and also I unhooked the wire harness from the back of the push button 4 wheel drive from the dash. When i did this i was still blowing the 20 amp fuse as soon as I made contact with the fuse blades. The 30 amp fuse won't blow like the 20 amp does, but over time it has blown within a weeks time of installing it.

What does the ATC module look like?

So you think it is either the ATC module or the encoder motor?

Those are the only two items that the ATC fuse supplies power to. My guess is the encoder motor. It could have fluid that leaked into it from the case causing it to short. The 30 amp fuse is not blowing as quickly because it is able to handle more current. The problem with this is that you run the risk of damaging something else by installing a larger fuse. Potentially damaging wiring, or other components.