I purchased a D17 III Diesel a few years ago and it had the ignition switch set up to have the push button energize the manifold heater, with the key in the on position. Ignition key to full clockwise would crank the engine

I changed the wiring to be the same as my factory 185, key to on position - push button will crank the engine, key full clockwise will energize the manifold heater.

Personal preference, either setup got the job done

The D17 IV and 185 operating manuals suggest keeping the manifold heater energized when cranking the engine over, in colder starting conditions to improve starting the engine

I have not used this procedure.  I plug in the block heater on either tractor and use the manifold heater for about a minute and that is enough for starting 

Perhaps if one decided to keep the manifold heater energized when cranking the engine one of these configurations would be easier to execute????????

The safety switch / push button to energize a motor is a standard industrial design feature.  I feel it is a very safe way to start the tractor 

Hope this info helps you with your D17 Diesel

On my D17 III I use an external tank type block heater. It heats up the block in less than an hour. The low point uses the block drain valve entry port on the RHS of the block, and the high point enters the top of the engine cylinder head in a port into the internal cooling channels right next the battery.  The heater uses the thermal effect of hot fluid in the heater tank moves upwards and displaced cooler fluid in the cooling system down and eventually into the heater tank. You can feel the hot fluid in the upper connection hose right after you plug the heater to a 120 volt feed.  I have seen other connections into the engine cooling system hoses/thermostat housing that work as well.  The key is to get a high point and low point so the cooling fluids can circulate thru the heater and back into the engine/block

Once the hot fluid starts to circulate, conductive heat transfer into the block metal soon heats up the entire block, getting it nice and toasty!!

Make sure you have positive flow in your system -no check valves/thermostat valves to restrict the flow

Buy good hose that will handle the heat!!!

I have a 1000 watt Phillips and Temro heater.  Kat's also makes an excellent unit

fyi....the external tank type block heater installation is shown in the AC parts book

https://parts.agcocorp.com/ca/en/apbcontent/model/agcoallis/79001558/D17%20SERIES%20IV%20TRACTOR/76" rel="nofollow - Parts Book | AGCO Parts

fyi ....my 185 has a factory block heater, very similar to a car/truck design, so not too applicable to your 1957 Series 1  

A pic of your switch front and back would be helpful

An AC switch should have the "off", "on", and momentary spring loaded turn fully clockwise position (that returns to the "on" position when released), similar to car/truck ignition switches.

You noted in your initial post that your switch had no stops or the spring return when fully clockwise.  It is important to confirm if your switch is working properly prior to proceeding with wiring options

Assuming your switch has the mechanical features described above (it turns/feels like a regular car/truck switch) you should test it for electrical functionality

Key in the "off" position, there should no conductivity from the "battery/ammeter" lug to any other lugs.  if there is ANY conductivity, your switch has an internal fault and might be the source of your parasitic load, that is killing your battery

Key turned to "on" position, there should be conductivity from the "battery/ammeter" lug on the switch to at least one lug, perhaps more.

Key turned all the way clockwise, and hold there, there should be conductivity between the "batt/ammeter" lug and one or several lugs

Keep a record of your testing for future wiring hookup

Your push button switch should be tested to ensure no conductivity between the two lugs when in the "off" (not depressed) position, and total conductivity when depressed

Next choose how you want your tractor to operate. 

Both options require the momentary circuit engage / spring return action of both the push button and the spring return on the key

One other suggestion would be to remove the side panels under the fuel tank so you can see and confirm where the wires you are connecting to the switch come from/go to.  You will be connecting to the starting motor solenoid, and the air intake manifold heater solenoid power supply wires that activate the solenoids.  Also good idea to confirm other wiring in the dash panel so it is the same as the diagrams Steve(ill) sent you above

Hope this helps

Good luck with your project