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After taking apart the dash and tracing the wire from the fan switch under the glove box and out onto the passenger kick board I found the resistor block... It's against the firewall at the passenger's feet directly behind the glove box (it's white).

All one has to do is un-screw one screw and pull the old block out and put in a new one ($12 at the dealer). I was told (from various sources) that the blocks go bad fairly often because they have a ceramic coating on it.. mine was really cracked and brittle. The crappy thing is this happened at 38,000 miles.

Another crappy thing about this is that once I found where it was it only took me a few minutes to swap the part... the dealer was going to charge me about $100 to do this.

Hope this helps, I know a few people said they were having this problem...
Matt
 
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This was exactly what was wrong with my cougar... bought the new part for $6 from my local dealer... thanx for posting this info, helped me out... these forums have been great reads, no matter how old the posts are
 
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Dude! Thanks soooo much. This was driving me crazy! I'm fixing this little bastard this weekend.
 

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Yeah it is really easy to replace. When I worked for the Ford dealership I did a lot of recalls on Contours and Mystiques. The main recall we had on those cars was replacing the resistor or the switch because they would burn(literally burn) out. If the resistor doesn't fix the problem you will have to get the wiring that goes to the resistor or the wiring that goes to the switch. All this was part of the recall package.
 

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Thank you Matt for the location. Here is a link to a slide show of pictures I took for this How to. The block is held in place by a hexa nut. It is under the dash and behind the glove box. In the pictures the white one is the original and the blue one is the new part. It cost just under $8:50 in Houston and it took me 10 min. to replace the part. In the second picture you will see the location. In the 3rd and 4th pictures old and new part side by side. 5th picture of the tool and the 6th picture if you can see it shows that the leads are rusted. My car has always been under a car port, in the garage or underground parking until two months ago. We have had family here all summer to help with our toddler. So she has gotten hit with a lot of rain and I think the weather led to the rust. If you need to replace this, it is really easy. I give it a 1 on a scale of 1-10, with 1 being the easiest.

Slide show
 
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