I found this thread and it sounds like the same problem. Can a neutral safety switch just go bad? Can I get one from NAPA or should I get one from Rock Auto? Thanks. http://www.maverick.to/mmb/showthread.php?t=80300&highlight=neutral+safety+switch
It may just be the picture angle but the red wire coming from the battery in the pic of your solenoid looks like it needs to be tightened up.