This has happened to a lot of 850 owners, basically, it's the ABS/TRAC controller that may be bad. Or, some people have found faults in the ABS sensor, which is located in each wheel. If it's the former, the controller is a black plastic box attached to your ABS pump. Removing it can be a pain because it is attached by six very small hex-head screw that may be corroded by rust. If so, it could strip easily.
However, since your controller may be dead anyhow you can just hack it off if the screws become stripped. You can obtain a replacement unit for ~$400 mailorder, or try to find a used one through a junkyard parts service on the web.
I've changed my ABS/Trac controller and the problem is gone.
Best,
Peter
96 850R
02 Vette Z06
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