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So you hear the relay clicking, and the inhibitor button/light seems to be working OK, right? The dash light and the solenoid are on different circuits as from the relay. So one can work and the other not. But also if you are in o/d and something impairs the connection from the relay to the solenoid causing it to drop out, the dash light would show no change.
Your problem sounds like wiring, and the place to check is the wire connecting to the solenoid. The connector/terminal may have gotten loose (age & crud). Also, maybe the engine-tranny unit is moving a bit as the load changes and that wire is pulled tight - how are the motor and transmission mounts?
Good Luck,
Bob
:>)
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