Okay, here's the problem I'm having:

When I turn the key off, the "SECURITY" light continually blinks (like it should). The doors are unlocked and open. If I lock the drivers door and shut it, it keeps blinking. Then if I lock the passenger door, the "SECURITY" light goes solid (like it should) until I shut the door and it goes out (like it should). Sucess... the car alarm is set, and if I try to unlock it from the inside and open the door, the alarm sounds (like it should).

BUT:

When I turn the key off, "SECURITY" light blinking, doors open, if I lock the passenger door first, the light goes off imediately. I can then shut that door, lock the driver's door and shut it, but the light stays off and the alarm does not set. Why?

 

Also, the door ajar light never comes on though the bulb is good - not sure if that's connected or not..

 

So you don't have power door locks?

Appears normal if you have manual door locks.
This part doesn't make sense unless Bubba has messed with the
wiring to install an aftermarket alarm system.

It appears the Door Ajar switches provide a ground for the Door Ajar
light bulb. Has no connection with the Theft Deterrent system. A Door Ajar switch is located on the back side of each door near
the hatch release switch.

 

I do have manual locks, and it DOES act normal if you are locking the driver's door first. It only doesn't work if you lock the passenger door first.

 

Can you post the Theft Deterrent schematic for your 87?

Here's the description of how the manual door locks should
work when setting the alarm.

Both door lock switches must be locked. (the switches are in
series). The last door lock switch to be locked will Arm the system
after the last door is closed. This would be indicated before
the last door is shut because the Security light will be on Solid.

The schematic I've posted indicates the door locks
are in series. The schematic shows when Pin B the (Arm input)
is only grounded when both switches are closed.

You're saying with both doors open and both door switches
unlocked, (Security light blinking) you lock the passenger side door
the Security light goes out?

That makes no sense unless the 87 schematic is different from
the one I posted. (1986) Why it makes no sense is because the door lock
switches are in series. The Theft Deterrent Module can only
detect when both door lock switches are closed because a ground
signal is placed on Pin B. (Arm input). As long as one door
switch is unlocked the Security Light should blink.

Either the schematic is different from the one I posted or when you open
each door one at a time, the Security light is not blinking/coming on which
would indicate one of the tamper switches in the A pillar door hinge
area is not working.

The Theft Deterrent Module is the same for 84-89.

 

"You're saying with both doors open and both door switches
unlocked, (Security light blinking) you lock the passenger side door
the Security light goes out?"

Almost right.. I just went out and checked it because I couldn't remember for sure. Actually, with both doors open and both door switches unlocked, (Security light blinking) I lock the passenger side door. The light keeps blinking until I shut that door. Then it goes out.

Of course, it shouldn't go out since the driver's door is still unlocked and open.

 

That would indicate the Theft Deterrent Module thinks
the driver side door is closed.

When you only open the driver side door does
the Security light blink?

If it doesn't the door pin switch in the A pillar is
not closing when the door is opened.

The switch has three wires that are grounded when
the door is opened.

1) Tan wire for key in ignition chime.
2) White wire for courtesy lamps.
3) Light Blue wire for Theft Deterrent Module (Sets the alarm when
both door locks switches are locked and both doors are then closed).

 

Hey, you're right! I just ran back outside for some more tests.

First, opening just the driver's door does not make the security light start blinking.

Second, I tried opening both doors (security light blinking), then I locked the driver's door but let it open. Then I ran around to the passenger's door, locked it, and shut it. It activated the Theft Deterrent system even with the driver's door still open. Unlocking either door made the alarm go off.

Funny though, the car partly knows that the door is open because the courtesy lamps come on when just the driver's door opens.

 

I've never seen the switch but the schematic shows the switch
has 3 sets of contacts. 1 set of contacts for each wire.
Three of the contacts are grounded.

Most likely the switch is corroded. If you don't want
to replace the switch, short/connect the Light Blue wire to the White
wire and that should take care of the problem.

When the door is opened the White wire goes to ground and
will ground the Light Blue wire at the same time.

 

I wonder if this would also solve the problem of the "Door Ajar" light not coming on when either door is open?

 

No, the Door Ajar switches are on the back of of each door where the
hatch release switches are. When the door is opened, the switches
pop out and ground a wire that goes to the Door Ajar bulb.

Note: The Door Ajar bulb will only light when one of the doors is open and the ignition is
On, Start or during the Bulb test which is the position just before Start.

Spraying some WD40 in them may free them up if they're sticking.