I have a 1993 240 and the switch which drops the tranmission into 3rd gear is not working .I removed the switch and the dash light will not come on ,but if I take the fuse out it will what could be wrong a wire that is grounding it thanks for any help

Before blaming the switch (sometime the fault, especially if it isn't used much), did you short across its contacts when you pulled it out? You only need momentary contact for the proper action. If that still didn't do anything, then it isn't the switch.

Most often, by far, it's not the switch that's the problem, but the overdrive relay (located behind the right-hand center vents, accessible by removing the glovebox and reaching in from the opened space). Usually its problem is that it fails in the OD-out mode, meaning the light is on and you're stuck in 3rd or below (no 4th or OD gear), but it could also occasionally fail in the reverse.

Another problem area is the solenoid itself (mounted on the transmission), an expensive part, but it's independent of the dash light, so because the light isn't lighting up, I'd stick to the possibility of an electrical fault.