Hi Shorn,
I have experienced 2 issues in the past that have caused slow or no O/D activation. The first was when the button under the plunger flattened over time to cause the solenoid plunger to extend very near or past the coil's effective pull range and cause the O/D to "sometimes" activate. Since the old rubber button was still in place and under the plunger during the initial investigation, I overlooked its condition until totally removing the solenoid in preparation for solenoid replacement.
My second issue was as a result of using Red Line MTL fluid in the O/D. This is a very good manual transmission and overdrive synthetic fluid but also tends to leak through any possible orifice. Although I did replace the "O" ring that seals the O/D activation shaft passing through the O/D, it was obviously not sufficient to constrain the MTL fluid and it filled the solenoid housing (the BJ8 solenoid housing is a closed compartments) sufficiently to lock up the plunger. As it turned out, I may have overfilled the unit and the simple fix was to reduce the MTL fluid level within the transmission/overdrive to just below the shaft "O" seal and, as Brinkerhoff suggested, readjusted. All has worked perfectly for the past 10 years.
One last point. I had installed a 10 amp in-line fuse at that time to protect the car's original solenoid and have had no issues.
All the best,
Ray (64BJ8P1)