I rather doubt that where the float switch actuates has anything to do with your problem. Bottom line is, it does actuate so your pump should turn ON/OFF accordingly. Could be a bad crimp or connection as you suspect after having worked on the wiring. Get yourself a cheap multimeter and you should be able to troubleshoot the wiring to find out where the problem is. Pretty difficult to troubleshoot something like this online without seeing exactly how the thing is wired up.
And Ya Dude's advice about a drain and collection container is pretty good. That's what I use.
Also, not sure here, but if you're not using a relay and low voltage (12 VDC) switching to wire this up, you should. Switching 110 VAC through a float switch can be hazardous. I suspect you're ok, since you mentioned using a cell phone charger power supply to do some testing already.
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