I take it that your latch mechanism doesn't look like this?

 

Ridin' Dirty:

No. Below is the mystery connector and a shot of my mechanism installed in the trunk. The connector will not even reach the mechanism.

The latch mechanism looks like the one at ECS Tuning.
https://www.ecstuning.com/b-genuine-bmw-parts/trunk-lid-latch-lock/51247840617/

 

Sorry that I can't be more help since I don't own a Z. Maybe these two pics might give you some insight. Are you sure that one of those two brown wires come directly from the trunk light? I ask because typically brown colored wires are ground wires in a BMW. Take a closer look to see if one of those two wires has a white tracer on top of the brown color.
https://www.newtis.info/tisv2/a/en/.../e85-z4-2.2i-roa/wiring-functional-info/body/lighting/interior-lighting/tyzgjh5

 

Ridin' Dirty:

This afternoon I had some time to do some testing with my voltmeter. With the trunk lid open, I have 12 volts on one side of light. The ground side is open. When I connect the ground side of the light to the negative terminal of the battery, the light illuminates. This is tells me that my ground is missing.

Looking at the wiring diagram, it looks like the trunk switch switches the ground for the light.

I did some more testing. It appears the wire from terminal 3 of the latch connector to the light does not have continuity. I am thinking the area that flexes between the body and trunk lid has a broken wire. When I have some time, I will look into this.

Thanks for the drawing.

Can I download a full set of electrical diagrams from this site? Do I need to pay?

 

Ridin' Dirty:
Thanks for the drawing.
Can I download a full set of electrical diagrams from this site? Do I need to pay?

Basically, that site is a "read only" with no provision to easily download specific articles. When I find a drawing or bit of text that I want to save, I take a "screenshot" (Print Screen/SysRq button on my keyboard) then paste it into a image viewer (IrfanView is my fav) where I can crop it as necessary, then save as a JPG in a folder for future reference.
FYI: I then use a free image hosting site (ImgBB.com) to post a link to the JPG, instead of only just a little thumbnail, in the thread that I'm responding to.

Glad to hear that the info was useful with your efforts to troubleshoot the problem.:thumbup:

 

I removed the flex connector between the trunk lid and the body. I found the brown with yellow stripe wire which provides the ground for the light was broken. Soldered in a splice and all is working again.

Thanks to all who helped!