The smoke probably represents a bad connection rather than a short (although it could be). 
 
It is a long time since I owned one of these, but from memory the switches are quite easy to disassemble. The back of the switch, with the fixed contacts and connections is held on by small parts of the metal body bent inwards. Straightening these enables the switch to come apart, so that you can see exactly what is wrong, and possibly correct it. 
 
Before starting, mark the body and back so that you know how it goes back together, and note very carefully at each stage exactly how it goes together, marking bits as necessary. Take care, as the moving contacts are spring loaded. 
 
The problems with the actual switch may be limited to worn or dirty contacts and lack of lubrication, but wear of the bakelite track between positions and consequent poor indexing may be a problem. It may be possible to fix this (at least temporarily) by carefully filing the back thinner. Unfortunately, there is little you can do to fix a worn lock cylinder except to replace it, although a new key ordered by number from a good locksmith (not a key cutter!) may help.
 
John
				
			 
			
		 
			
				
			
			
				John
JDNSW
1986 110 County 3.9 diesel
1970 2a 109 2.25 petrol
			
			
		 
	
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