Thats where the 12V for the cig lighter connects to the moving ashtray cover.

Look at the back of the ashtray cover you took out. You'll see the contacts.

You should see 12V there with the ignition on.

dd

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'85 300D, 'Lance',250k, ... winter beater (100k on franken-Frybrid 3 Valve Kit)
'82 300D, 'Tex', 228k body / 170k engine ... summer car
'83 300TD Cali Wagon 210k, wife's car