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ok,silly question is the lever supposed to be towards the front or rear when overdrive engaged? book keeps saying knob should be in to engage which puts the lever towards the rear

I don't have one to look at but the Borg-Warner manual figure 3 & 5 say knob pushed in, shows lever end pointing away from solenoid. Solenoid is able to move pawl so OD possible. Figure 8 says knob out, lever points toward solenoid and pawl prevented from moving so locked out.

when the lever is to rearward position i have no continuity across the lockout switch, when in forward position i have continuity across lockout switch. could this be a malfunction of this switch?

Not sure what you have going. Does your unit does look like the drawing with the switch in same place?

With the knob pushed all the way in, lever should be all the way to rear and switch should be closed. Are all the parts original? The second and third pictures are the procedure for adjusting the cable. Might try and see if it helps.

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Your condition with the lockout switch doesn't sound right.
On my R11 the lever has to toward the rear in order for the OD to engage but my tranny doesn't have any provision for a lock out switch so I can't help you there. Logic would dictate that with the lever to the rear and when the governor makes contact to ground your solenoid should activate. In theory when you hit the governor set speed the wire going to the relay should go to ground and activate the solenoid.

ya, the switch is original and cable adjusted right, i'll pull the switch and take apart to see whats going on.will keep you posted

I believe the lockout switch under the dash should make contact when the control knob is pushed in. The system works on making the circuit grounded. It would be open until the governor is activated. If it was open the circuit would not be complete.

Exactly right--In 51-4 though, the lockout switch moved from under the dash to end of OD unit and is activated by the lockout rail--but function is the same. 55-56 switch was eliminated entirely.

That's good to know. I've never worked on any newer than 50. Learn something every day.

took switch apart and was put together backwards. put it together right and works fine now. freewheels now but still does not go into od. will put bypass switch back across governor and road test to eliminate governor as problem. will keep you posted