The circuit for the rear window defroster switch for the 1983-85 300SD models is identical. The switch activates a relay with timer, located at the left rear of the fuse box as you face the car - it's the tall one in a black plastic case.

If the user does not touch the switch for 30 minutes, the timer will switch off the rear window defroster. However, the user can also override this at any time by depressing the lower half of the toggle switch inside the car.

Mine was switching on, but could no longer be overriden to switch off. I pulled the relay and pried it open with a couple of flat bladed screwdrivers. Sure enough, one of the solder connections on the circuit board was broken - easily visible to the naked eye. One more case of diesel vibes breaking something!

A few moments with a small soldering iron and all is well again. Try this before blowing $45-75 on a new relay.

BTW, the relay also activates the sliding sunroof motor.