Good explanation from KGP&R:
1968 VWs were a transitional year at best when it came to wiring. There were 3 different flashers used on 68 models with 9 or 3 or 4 terminal (in that order). Because of this, there is no true wiring diagram for mid 68-70 model Bugs & Ghias. But VW does show how the 3 terminal flasher is hooked up in the Bentley Manual; go to Section 10, Page 33, Figure 47 for the proper wiring. When VW discontinued the 9 terminal flasher in early 68, they VERY briefly went to a 3 terminal flasher. Later in 68, they superseded it to a 4 terminal style, basically adding a ground wire circuit for better grounding. Below is a description of how and where the wires go on the 3 and 4 terminal flashers (original style):
Original 3 terminal flasher, mid year 1968, Original VW Part # 211-953-215, 215A, 215B:
This flasher internally grounds to the chassis thru the hold-down screw that attaches the flasher to the dash support bracket.
Terminal + or +49 = Black Wire - goes to terminal + on the Emergency Flasher Switch
Terminal 49a = Black w/Green and White Stripes Wire (two of them actually) - goes to terminal 49a on Emergency Switch, 2nd wire goes to Turn Signal Switch.
Terminal KBL = Blue w/Green Stripe Wire = Goes to the Signal Indicator Light in the Speedo.
Original (and replacement) 4 Terminal Flasher, Late 68-70, Original VW Part # 211-953-215 C.
Looks just like the 3 terminal flasher box above, except it has an extra terminal:
Terminal 31 = Brown Wire - goes to and attaches to chassis ground. The 3 terminal flasher above didn't rate too highly in grounding reliability thru the attachment screw, so they added a ground wire terminal to make sure it REALLY grounded to work properly.
All other wires mentioned above for the 3 terminal flasher is wired the same.
Current replacement for the two flashers above, part #211-953-215 C This is a small box type flasher normally used on the 71-later VWs, both air and water cooled. Terminals have similar numbers, but is wired as follows:
There is no KBL terminal, there is only +49, 49a and 31. They are wired the same way as above for the 4 terminal model. The Blue/Green Wire that would normally be for your dash light (KBL) is \"piggybacked\" with the Black/Green/White Wire to terminal 49a. Works great, in fact a bit better than the original. Just get a \"tie-wrap\" and attach the flasher to the support bracket with it with the terminals facing down (flasher relays work better when terminals are facing down, dunno why, they just do).