Just pulled this off of another forum :-
Headlight switch issue (2002 Z3 Roadster) …..
1. Review of the electrical diagram identified pin #8 and #6 as the two pins to jump to bypass the dimmer portion on the headlight switch. (The dimmer for all the instrument cluster lights is a rheostat, but the BMW wire diagram labels it a dimmer control.) (I want to thank Dkindig for the help in this area)
2. I took the defective switch completely apart and traced the circuit board with the BMW wire diagram and identified all the power "in" pins and the power "out" pins. Pin #8 is a power out pin that receives its input power through pin #5 when the headlight switch is pulled out. The dimmer transfers power to pin #6 as it is rotated to illuminate the instrument lights.
3. When I jumped pin #8 to #6 I blew the fuse #37 10amp. (I put a 20 amp fuse in instead of the 10 amp and had lights on and was able to find the area where the lights didn’t work to locate the short) I found I had a pinched wire in the light system for the blower speed knob in the heating and AC area. Unfortunately the rheostat (dimmer switch) in the headlight switch was acting as a fuse and burning up before the 10 amp fuse failed. I took the switch apart (it just unsnaps) by carefully prying out the parts from the back side.
4. I found the wire at the start of the rheostat was burned. I soldered an 18 gauge copper wire to the start of the rheostat and the wire coil that was burned and the dimmer function worked as advertised. I am now operational again.