My 2001 VDP was stuck in Valet mode. I searched the forum for a solution but none of the scenarios solved the problem.
The problem was a broken tab on the latch mechanism that pushes the switch. The tab had broken off so the switch thought the trunk was open all the time. Someone had disconnected the switch probably because the trunk lights ran the battery down. The latch mechanism will have to be replaced, not the switch which works fine. I reconnected the plug and taped the switch so it signaled that the trunk was closed and this solved the Valet Mode problem. I shopped around and found latch mechinisms for from $60 to $250. I downloaded the service manual from the forum and it was a big help.
Hope this helps.

 

Don't forget to check Ebay for latches.
1998 2001 Jaguar XJ8 L Rear Trunk Boot Lid Lock Latch Assembly GNA3500AB | eBay


You can find some of the micro switches used on the car from these two companies.
Mouser Electronics - Electronic Components Distributor
Newark element14 | Electronic Components Distributor


Good detective work.

 

I must add another aspect to this solution. Even though the switch recognizes that the trunk is closed it also needs to signal when the trunk is opened. I pushed the valet mode button and it locked up again. In other words when you activate the valet mode switch you will have to trigger the switch to unlock the valet mode. To to solve this, until I replace the latch, I threaded the switch through the slit in the trunk lid liner that the emergency trunk release handle comes through. That way I don't have to fish it out from under the liner. Who knows, maybe on day I'll actually fix it.