Is there supposed to be a light somewhere in the ignition that illuminates the switch in a 69 XR7?
Yes, it goes into a hole in the sheet metal backup “bowl” piece for the switch which sits behind the dash.
What voodoo black magic sorcery is this? A lighted ignition switch?! Did all 69’s have that feature? Was it on all the time or only when the dash lights were on?
Yes and the latter.
How about a light above the ash tray to illuminate the open door. Saw on a 68 XR7 once.
So where does the light actually shine? Through the keyhole itself or onto the face of it?
Is the light bulb the same as in the back of the temperature controls?
Probably. Check interior lamp chart on WCCC site.
Illuminates the key hole and around the cylinder edge as recall Jody.
I have a couple of these ignition lamp housings/bowls for cheap if anyone wants them. They are from Mustangs, but I’m sure they are the same for your kitties. PM me if interested.
Mine only comes on when the parking lights are employed.
Actually, its anytime the dash lights are on (which is different than when the parking lights are on), and all of these lights dim on the headlight switch dimmer.
Not sure I like that setup. I can see why Mercury built it that way, but I’d rather not have to turn the lights on to find the keyswitch. Why not just turn on the courtesy lights. I would have designed it so that opening the driver side door would turn on the light for 60 seconds or so.
That would be pretty fancy for back in the 60’s.
That’s the way it is supposed to function.
Sorry guys, I was TOTALLY off base on this. 
The ignition switch light is only on when the headlight switch is in the parking light position (as Sam related and Scott confirmed) and it does not dim with dash lights.
Edge and the keyhole as well. Pretty good for 1969 technology actually!
So is there something special about the bezel that lets light through? Anyone have a picture of it lit up?
Not really, just the reflector mentioned previously and a light that shines through the space between the face of the lock cylinder and the bezel nut. My parents’ 65 Colony Park and 68 Montego had this feature too. I bet most Ford products from mid-60s on that had the ignition switch in the dash had lights in the switches. At least some of the “Upscale” models did.
It is suppose to only come on when the parking lights are on and it does indeed shine through the keyhole and a little in between the cylinder and the bezel.
