Hey, Duff, I found my '54 book. Attached are a wiring diagram for a '54 Firedome, and an exploded view of a Powerflite transmission.
Looks like there should be two switches on the transmission; a neutral safety switch, and a back-up light switch. I believe the switch you have pictured is the back-up light switch. Judging from the drawing, the neutral safety switch should be just around the corner on the back of the main transmission case.
I would bet that the two smaller wires go to the back-up light switch and the two larger wires go to the neutral safety switch.....but I am only guessing, Some simple tests as Latech suggested should help you get it sorted out.
Hope this helps...