Having issues with the neutral switch.

I have a 01 FZ1 w/12K, when I put the bike in neutral the light comes and goes like its not engaging all the way. the only way I can get the light to come on is push the shifter down a little and the light will come on right on the verge of popping into first. but then it acts like its shorting out or something when I start it like that. the only way I can start it is with the clutch in and sidestand up.

what could this be?
 
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