neutral switch, light in 1st gear

[Steevensi]

Hi Guys,
I'm in the process of changing my water pump (1982 interstate).
While reassembly the front cover, I tested the neutral switch and it was ok.

Now that the cover is back on, being hold by 2 bolts only, the neutral light comes on in neutral AND in 1st gear.
I'm guessing I'm a bit out of alignment?
I will remove the cover tonight and turn the actuator a bit to see if I can make the light come up only in neutral.

Would you see any other reasons the light would act like this?

Cheers

[Steevensi]

Moreover, when installing the waterpump into the cover, I used the new crush washers and torque them to 9#. However, they crushed a lot more than I expected, meaning that they become larger then they were. Can you confirm if they are supposed to stretch that much when torking them?
I think the washers I removed were not stretched. But maybe the PO did not use crushed washers if he changed the water pump in the past.