I am seeing the Reserve light always on but dimly on my 1979 300SD.

I like it this way since I have a current check that the lite bulb and circuit is operational. When a real alarm occurs the lamp glows to full brightness.

This is one of those rare occasions where a malfunction results in a useful feature.

From your findings the cause would appear to be a buildup of algae across the contacts acting as a resistor and conducting some current to ground.

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Dionysius