There isn't anything attached to the "S" wire to really burn out but the contacts on the small button on the arm can get dirty with slight arcing over time. It is the earth wire to complete the circuit to toggle high/low. Undo the screw which holds it into the arm and polish the contacts with some very fine wet/dry paper. If the wire is "cooked" someone has hooked it to a terminal with power and there has been a dead short, but for whatever reason, take the arm off and put a new wire through and connect it to terminal "S".
Those firewall mounted dippers on the type 3 would have to be the most uncomfortable to get to! Leave it standard.
The link below should help. It is 6 volt but OZ Type 3 early 12 volt wiring was the same in this area. I think it was the 1968 year model in OZ which started the 12 volts here. A year earlier in Germany.
http://hem.passagen.se/vwtype3/type3.html
Select "wiring diagrams" and then " 1500 N 1964-1965"
[ Edited on 26/2/2006 by 1500S ]