Your U1350 has a lot more electrics than my U1250 used to have, mine didn't have any fancy key locking switch and my engine turns off manually, not with a key. Mine didn't have a battery disconnect, and I don't really understand what you mean by "reversing the battery disconnect", surely it is just a simple on-off switch, one position is on, the other is off? The battery disconnect switch, it either isolates the main positive lead or the - /earth lead.
The earth connection is on the same frame as the fuses and relays, only right on the bottom. On mine it was a bolt welded to the dash. You need to take the instrument panel off to see it, alternatively you could pop out the speedometer by putting you hands behind the dash.
Car electrics are actually very simple, all you need is a multi-meter to see what is going on. Brown wires are earth wires in MB land, and there always needs to be one positive wire, and one earth wire. The circuits as always simple, at one end is the battery +, the other the -. The chassis, engine, body etc is always -. So all you need to do is sort out how the positive voltage is getting to the chassis. If you have power 12/24V going to the ignition switch, but none of the leads coming out of the switch are showing power when the switch is in turn one position, then the switch is dead. Like all thing MB, you can take them apart and clean them, just watch out for the tiny springs and balls, as they will try and escape when you open the switch. It looks like you have a solenoid on the switch, which stops you from taking the key out. Does it also lock the steering? My OEM switch was a 0FF-ON-Start switch on the dash, simple and very cheap to replace. I added a 100A solid state relay to take the load off the switch, as I run a lot of extra electrical circuits