Neutral indicator switch
Moto Guzzi V700, V7 Special, Ambassador, 850 GT, 850 GT California, Eldorado, and 850 California Police models
Removal and replacement
The neutral indicator has a curve/bend at one end. When installing the indicator, the curved/bent portion of the indicator should point down.
As an alternative, the indicator can be installed with the bend facing up. Then, take care to adjust the bend so that it just makes contact with the nub on the shift drum. Doing so will make the neutral indicator light much more precise. Greg Field provided this tip.
Neutral indicator switch setup and adjustment
Thanks to Joe Tokarz for sending me this information via email. In Joe's own words:
Here's a method to adjust the neutral indicator switch. The process is to find the point where the switch contact just misses making contact with the shift drum in the first gear position so when in the neutral position, solid contact is made to the bump on the drum.
Bike electrical power or an ohm meter works for testing.
Put the bike on the center stand and in find first gear.
Remove the switch and make sure the curved portion is pointing down. This is also a good time to remove oxidation from the brass. Replace or install a new gasket.
Still in first gear, install the switch and turn on the ignition. If the indicator is not ON remove the switch and slightly bend the contact up. Reinstall the switch and test that the light is ON. If not repeat the process until it comes ON. Then remove the switch and slightly bend the contact down and retest to see the light is OFF. Move the transmission to neutral and the light should be ON. Shift back to first gear and neutral as a retest.