I believe I would have pursued the same course you suggested after I discovered how the switch is made, but I have always been a sucker for the power of suggestion. I discovered that there is one position where there is only one contact mount pressing against the nylon inside, versus 4 or 5 in other positions. To get is back together I pressed a dowel through the hole in the cover, against the arbor of the switch, while sliding the cover back on. Otherwise, the arbor skews due to the pressure of the contact mount.
I checked the action of the switch before disassembly with a large screwdriver, and I thought there was a "hitch" in the position II (I get my #'s confused - the "RUN" position). Once reassembled I did not notice this same feeling.
The contacts looked good visibly, but I believe the cleaning (with a No 2 file and DeOxit) in fact helped. Out of a set of 18 files, only one would fit between the contacts. Your suggestion of a nail file I should have heeded - I believe it would be thinner.
Try as I might with a vise, I could not close the gap between the edge of the cover and the base totally. I would estimate 1/64" was left. Good enough for government work. I appreciate your input and experience Klaus - as always. $55 or so saved, for now.
Don
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