Rich,
The NS switch does interrupt the ability to start the vehicle. I assumed it cut the power from the solenoid as well. I've never had a Ford with an automatic transmission with the exception of a '66 Tbird. However, a ground isn't the likely culprit for intermittent operation.
-Keith
Yes, on an Auto trans Mustang, it does interrupt the ability to start but it ONLY interrupts the "start" signal (from the key switch) to the fender-mounted solenoid. (an exception to this is the Tilt-Away column cars which have yet ANOTHER interrupter switch to the START signal, mounted on the column) On a MANUAL trans Mustang, there is a jumper wire (at the same underhood connection as an auto trans Mustang and is used to by-pass the switched "Park" or Neutral" signal, allowing it to start no matter what the gear selection.
On NEITHER manual or Automatic Mustang is there a 12V or 6V (resistor) circuit source going out to the ignition coil anywhere near the Neutral switch. On AUTO cars, the 4-wires that go into the neutral safety switch are two wires that are switched open/closed for "START" when in Neutral or Park and the other two wire are switched open/closed to supply the 12V to the backup lights. That is all. Nothing "magic" going on in that switch. This holds true for virtually EVERY classic Mustang without a starter delay. (Starter delay cars have a form of "magic" going on)