1934 Starter switch
 

Still hunting down a short and opened up the starter switch. Not sure if this is the cause or the result of the switch.

Has anyone experienced this with a starter switch?

Re: 1934 Starter switch
 

The starter motor pulls a lot of current when energized as well as deenergizing. This high current will cause arcing and pitting of the switch contacts. What you have found is not unusual for a used switch. I always press down on the start pedal firmly and quickly to start, this MAY eliminate some of the arcing.
Your photo does not appear to be the cause of the short circuit.

Re: 1934 Starter switch
 

If it was short to ground the case would have a burn spot and not the contacts. A short somewhere else in the circuit could pull so much current it could melt those contacts. That would be a big-short, a major cable or the starter itself, arc welder type sparks.