On the slightly newer 250 models(88 one) it earths through the reverse switch then the neutral switch.. They are in series..

I have been studying the wiring diagram again (although not for my exact model but similar enough I hope). The neutral light is indeed in series with the reverse switch. I think I might need to ensure the reverse switch is operating properly. Perhaps its stuck or not properly adjusted. The ATV sat unused for about 15 years... wouldn't surprise me a bit if it is stuck. I can't wait to get back to it and check it and the power wires.

Check to see if you are getting 12 volts leaving the switch going to the light when in neutral.

I have reviewed a wiring diagram for a similar model... it appears that the neutral switch will ground when in neutral... I checked it with a meter and it does indeed ground when in neutral. I had the ATV running and the wheels were not turning when revving the engine, and when I shifted it through the gears the back wheels would indeed spin so it was definitely in neutral. I took out the neutral switch relay and bench tested it... works perfect. I did find one corroded terminal on the relay but cleaning it did not resolve my 'no neutral light' issue. I will have to go through the harness to see if there are any other bad connections, or perhaps a critter munched through something while it was sitting for all those years. I have to think it's gonna be something simple... just gotta find it. This is indeed making me crazy. The engine runs amazing, idles low and is responsive when you throttle it up. I have all the body panels, the front and rear carry racks, the seat and the right rear wheel off. I want to fix this issue before I put all these parts back on. But I wanna ride it NOW!!! Patience pays... I'll get it sorted and then it will be perfect!