I had a problem with my OD a year ago. Would drop in and out while driving. I found out the problem was in the OD relay. The switch would turn the relay on which would power the solenoid on the OD. But the contacts inside the relay would barely be touching and therefore a slight bump in the road would cause the Solenoid contact to open, even tho the relay was still on. If I actuated the switch again it would re-engage until the next little bump. I hope you understand this. There are a PAIR of contacts inside that relay. One is the contact that carries current to the solenoid. The other contact carries the current that keeps the relay ON, even after the column switch is relased. If this second contact bounces open, the relay opens and even the dash indicator goes off. If the main contact - carrying the solenoid current- opens, the OD would drop off and maybe re-engage at the next bump. But the dash indicator might stay ON even though no current is going to the solenoid.
I was only able to diagnose this problem by temporarily wiring a light to the relay terminals and putting the light where I could see it while driving. I used an LED and resistor and about 6 ft of wire. Sure enough, every time the OD dropped out, the light went off, so I knew it was the relay contact opening up and not anything mechanical nor the solenoid.
I fixed the problem by prying open the relay and bending the contact arms to be sure the contacts were in solid contact when the relay was ON.
See the dwg 4B on the right on page 5 section E1:
http://www.rootes1725cc.info/wsm145/wsm_e/e_24.htm
for the wiring diagram. I put my test lamp between C1 and chassis ground. The lamp will be lit whenever the solenoid wire has 12 V applied. If the OD is NOT engaged and the lamp is lit, you have a problem with the solenoid or the mechanicals ( or the wire from the relay to the solenoid). If the OD is NOT engaged and the lamp is not on, then you have a problem with the relay. I have now wired the LED permanently in. It's a better indicator than the original, because it shows not just that the relay is on but that 12V is actually at the Solenoid wire. I'm sorry but the dwg does not show the original OD indicator, but I know it is possible for the original OD indicator to be ON , while while the contact supplies no power to the solenoid,
Good luck,
Tom