This is odd--is a Genesis 1 mod hard to do or something? I thought it was the easiest thing in the world.
The first real console mod I did happened when I got Thunder Force 4 for the Mega Drive way back in 1992, I had ordered the thing from Die Hard (yeah I know, it was way back in the day though so don't give me the 'tude

) fully realizing that it wouldn't work without the mod. They said they would provide info on how to make the alteration with the game, but when I opened the FedEx box there was nothing but the game in there, so I did what any self-respecting shootist would do, I called them up to bug them about it.
Basically they told me to get a real hard razor blade (an x-acto knife will probably not do, here) and completely sever two connections, and I do mean COMPLETELY. I did precisely that with a garden variety razor blade, basically sawing on each damn trace until the tip of the corner of the blade was visible through the other end of the board. Once both of these lines were completely cut I had a bi-compatible and completely switchless Genesis model 1. It works so well that it's still my number one unit today.
When the unit is first turned on, it thinks it's a MegaDrive. If I hit the reset switch then it goes into American Genesis mode. Are there any caveats? Well yeah, there are--ONE game (1!) that I have ever tried did not work, it was an American version of Street Fighter 2 Champion Edition (I think... hmm... yikes I really should remember this!), after performing the mod I found that it would never work, even after pressing reset. Also, as I have a Sega CD, when I first turn the unit on, it doesn't want to work with the Sega CD--and it takes about 10 seconds longer, if I press the reset button within that first ten seconds the Sega CD still doesn't take it, a minor annoyance, I just wait half a minute then press the reset button and the Sega CD works fine.
I could look into this closer if you want but it will have to wait a bit as all/most of my game stuff is boxed up preparing for (yet another) apartment move later this month.
Edit--Hmm missed the part about your PAL switch, not sure how that would figure into this. I still don't have any PAL games. Since the PAL mode works with the US switch I am wondering what would happen if I were to use one though, I'd like to get a PAL game just to find out--are there any differences in the European MD version of Alien Soldier? (Asking because I have the Japanese one.) Are there any European MD games that were not released stateside?