Figured out a way to remove the sharp edge on the reverse rod, where it makes contact with the switch, without having to remove it. Just knock out the expansion plug in front by putting a small wrench socket behind the plug in front of the reverse rod. Forcefully slam the tranny into reverse and POP goes the plug.
I then attached a small diameter conical shaped grinding wheel to a dremmel tool and came in via the plug hole and rounded the edge of the rod. Now it's a much smoother and easier activation of the switch.
http://community.webshots.com/photo/141689703/142194968mmoXrG Hopefully today I will get another slightly shorter switch to experiment with. To me, a switch with a steel button instead of a nylon / delrin button would be ideal. I think it would hold up much longer, but maybe what I've done here by grinding the edge of the rod will give me many slams into reverse.