The oil light sensor in my 1998 Mazda 626 is faulty. My mechanic says it is not worth spending the money to replace it. Can you tell me how to locate and disable it?

As long as it hss had oil changes and is still sound i would say yes it is worth putting the money into it. A little advice for you. Do not buy the sensor at the auto parts store. Spend the extra money and get it from the dealership. Do the job once and be done. I know to many people that bought from the auto parts store and ended up doing the job over and wasting the money for the sensor. they could have used that money for the correct sensor from the dealership. As Bogdan said abve try removing and cleaning it with sensor cleaner from parts store first.google search where it is located on your car.

if the transmission will not engage a gear then the torque converter servo/solenoid will need attention
running the fault codes will identify the exact cause and at autozone the read is free.
drain out excess oil as that creates frothing of the oil which will give transmission problems.

Possible hard to start when hot. poor economy--cooling fans not working--overheating-- detonation sounds--. The switch is part of the engine management system and if it is faulty then the cpu alters other sensors settings as it tries to keep the engine in tune..

The oil light will come on with low oil pressure (it is most likely a faulty / blocked sensor). This could be a simple sensor fault or blocked pick-up or a problem with your pump. I would get it checked out - if the oil pick-up needs to be replaced or cleaned the sump would need to be removed. A quick visual is to open where you top up the oil and see if you can see no oil at the top of your engine if there is very little or none then it is definitely the pick-up and don't drive the car as you will cause wear. If you start your engine you should see oil "sloshing" in the top end - again if there is none then there is no lubrication for the top end.

yeah there is
go see this mazda mechanic in costa mesa ca or google m and m auto repair in costa mesa ca he would do it for cheapper

Check engine light codes at a local discount auto parts house, e.g. Autozone, Advanced Auto, or O'Reily's. This is a free service, there should be a code telling you what you need to replace or adjust. You may have a bad coolant temperature sensor, or a bad MAP (manifold absolute pressure), or MAF (Mass Air Flow) sensor. The Throttle Positioning Sensor (TPS) may be faulty, or the Fuel Pressure Sensor.(FPS)

The transmission range sensor aka neutral safety switch is located underneath the air filter on top of the transaxle and very easy to access. Replace this part (around $50) and it will solve your problem.
What happens is this, when your tranny warms up, it disperses heat to the sensor switch and if its faulty or worn out, will send faulty relays to the transmissiom computer module (TCM) and makes the transmission shift irratically (OD to 3rd and back while driving at freeway speeds). You tranny is not overheating like most people believe, its the switch. Mechanics are telling alot of people that their tranny needs replaced. Watch Out For These People!! They only want your money!!

On my 98 626 4 cyl, 2.0 it is located on the back right side of the engine underneath the intake manifold. You can reach it from the top if you have slim arm and small hand. Best reached from underneath.

Just a thought. I have a 98 626 5 speed. When the hand brake is applied the head lights go out but the marker lights stay on. Might be a switch issue with the hand brake...worth a look. The sensor should be located at the pivot point for the brake handle.

I'm afraid you have a bad or blown head gasket. does it have water on the oil stick too? may not be worth fixing if this has gone on too long you may want to take it to a garage. is it smoking out of the exhaust.