It sounds like the Neutral Switch isn't fully seated. This can also make Neutral really hard to find, the drum just wants to turn past it easily.
The best way I know to seat them is to have the engine in Neutral, look up into the hole where this switch goes, and make sure that you cannot see the shoulder of the shifter drum. They can slip outward, toward the outside of the engine, when the switch is left out for a period of time, especially if a shift was attempted with the switch out, or not fully seated.
Install the new 3x18 O-ring into the groove, then oil it up (or even grease it up) to help to let the switch body slide in easier.