There is a small 1/2"x3/4"x1/4" black resin component (KBP04-1 on one side,7237 on the other) wired in between the switch and the brush contacts.  It seems to be the culprit that has shorted out - the two leads going to the switch measure as common on an ohm meter.  (Yes, I totally isolated it so I could check what was connected to what.)

I am curious, what is that component for?  Would the tool work with it out of the circuit?  If I can't replace the switch assembly, I am considering hard wiring the tool (directly from the brush leads)to a separate variable device to control off and on, as well as the speed.  Think that would work?

No parts available for the 260, but I was wondering if a 275 switch assembly could possibly work.  Both single speed tools.

If so, how much is that switch assembly?  Are there any schematics of a 275 available online?  Or a photograph of the parts laid out like the excellent one of the 395?

Thanks for all help and suggestions.

someone's post in this forum in sometime at the begining of 2007.

Enrique

There is only one way to find out and that's to try

Re: your Dremel 260, you asked about a small 'resin block' between the brushes and the power-on switch.  It's marked 'KBP04-1' and is  a full wave (bridge) rectifier.  It is absolutely necessary because your tool is a DC motor running from your AC wall outlet.

This part can be obtained from your nearest electronics parts wholesaler (not Radio Shack).  That number crosses to a Philips NTE number 166, the spec sheet for which is enclosed, if I can get it to work.  DREMEL doesn't accept the file thype that I downloaded from Philips, try your library if you're interested.

It is possible that one of the four (4) diodes within this device have shorted or opened.

If you do put a variable speed control/switch to replace the switch, you will still need this bridge rectifier. 

The two leads marked 'AC' or with a sine wave logo, will connect to the switch and Neutral (the neutral or white wire in the power cable).  if the + and - leads from this device to the motor are reversed, the tool will run backwards.

Find someone with an electronics background and have them check this part.  All four device that live inside can be checked and your problem will be disclosed.  If all are 'good', look elsewhere for the problem.  If one or more devices within the KBP04-1 package test bad, replace the entire package.  ($2?) You have some leeway.  You don't have to use that part number, but if you do have to get another, it MUST be the same (or with higher ratings) electrically.