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"Each time the new one was installed and the key was turned to KPIII, electrical power from the battery was terminated while the wires were still attached to the posts."
Exactly what are the symptoms that lead you to believe battery power is being "terminated"? Evan explained how, in KP III, power to all ancillaries is temporarily blocked off while the switch is in cranking position III . There is no "inline switch" that does what you suggest — other than that switch function.
However, if something is preventing starter operation, it would be normal for the lights and radio, etc. go dead when the key is in the cranking position. Is that what's happening? If so, it sounds like a possible starter (or control circuit) problem.
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Bruce Young '93 940-NA (current) — 240s (one V8) — 140s — 122s — since '63.
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