The end of the nuetral switch fits into a groove in the shift drum; notice the vertical line below the ball in the attached pic, where the side of the groove has rubbed against the switch body. You may be able to move the drum from side to side with a screwdriver through the switch hole to align the groove with the switch. The trans should be in neutral before fully seating the switch, as there is a depression in the drum that the ball fits into. The o-ring should be installed into the case first, not on the switch.