WOW!! I finally know what is wrong with my wagon. My symptoms couldn't have been more exactly like yours. Hmmmmm
I certainly wish you could have snapped some pics of the whole process, but just the info itself is such a huge help, and it saved me from replacing my starter.
So, is this electrical portion of the switch the same on a 240 as on a 300? I can swap the one from Scar to the wagon if they are the same. I need to look up the procedure for removing the whole assembly I guess.
Thanks again, and a job very well done!

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Jimmy L.
'05 Acura TL 6MT
2001 ML430 My Spare

Gone:
'95 E300 188K "Batmobile" Texas Unfriendly Black
'85 300TD 235K "The Wagon" Texas Friendly White
'80 240D 154K "China" Scar engine installed
'81 300TD 240K "Smash"
'80 240D 230K "The Squash"
'81 240D 293K"Scar" Rear ended harder than Elton John