If the diode is shorted, the neutral light will come on when the clutch lever is pulled in; If it comes on randomly, it's not the diode. A possible cause can be that the switch on the bottom of the motor isn't fully seated in the case. The O-ring needs to be installed into the recess in the case first, then the switch. If the shift drum's groove is not in exact alignment side-to-side with the end of the switch, the switch won't properly seat.
Like Flybox mentioned, you can isolate the problem between the switch and the wiring by disconnecting the switch wire; if the light still comes on, the problem is in the wiring, and if not, it's with the switch.