As far as I can remember the light acts funny if one plug is bad and stops working if two or mor are bad on the 5 cyl engines. You should replace the bad one and hook up the one that was not connected. As for the bare wire use something to make sure that the wire does not short to the block.

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1979 240D- 316K miles - VGT Turbo, Intercooler, Stick Shift, Many Other Mods - Daily Driver

1982 300SD - 232K miles - Wife's Daily Driver

1986 560SL - Wife's red speed machine