I have blown 3 relays trying to troubleshoot the problem. What could be shorting to ground and what side of the relay is most likely the culprit? Any help would be appreciated-

do you own a multimeter?

Sounds like you have a short someplace, probably a frayed wire in the shifter. Pull out the stick shift is what I would do.

Auto or standzrd trans? Just so we know...

Anyway, twice now I've had to repair shredded insulation in the tranny/driveshaft tunnel area (we're on our 5th 240 now). Ours are auto trans, if yours are standard trans the wire path might be similar anyway. Easy job for a shop with a lift, or if you can get such a shop to put the car up for a few minutes. Or crawl under using jackstands VERY CAREFULLY.

Output wire from overdrive relay (located to left of glove box) goes down to the auto trans shifter box, then out front of box thru a grommet into the tranny tunnel. Drops down to right side of driveshaft, then goes forward along side of tranny.

Wire usually gets torn up where it goes down past the driveshaft. That's where you have to look or feel to see if that's the problem. First the insulation gets torn, then the wire gets broken and no more OD.

The fix is to cut it there, pull wrecked wire up thru shifter box, and send a new wire down via out the grommet at front of shifter box. Don't remove the grommet; you'll never get it back in. Lots of patience with needle nose pliers to feed 6 - 8 inches of wire out front of shifter box. Splice below car with crimp splice. Splice to original wire from relay, inside the shifter box.

You get into the shifter box from passenger compartment, two screws at front of box. Just slide it back to clear the rear tab, then swing it out of the way. Don't try removing it completely, that's a whole different story. Don' go there for this job..