Hi, my solder iron is burnt (attached image) and now while repairing it, i dont know what to connect where, I am assuming I can connect red wire (2) to red (4), blue (1) to end of diode (5) and bulb (3) to (5), please guide if this is correct or this will blow up.

 

Just to check; The cable at the top goes to a mains plug and the thing at the bottom is the actual iron?
I am confused by the diode. Does your iron have a high/low power switch?

 

Just to check; The cable at the top goes to a mains plug and the thing at the bottom is the actual iron?
I am confused by the diode. Does your iron have a high/low power switch?

Yes, the top wire goes to the mains & the bottom is the actual iron. No, my solder iron is the simplest with no type of control what so ever.

 

whats the color code on the resistor (if it were to indicate "plugged to wall"/"AC present" the typical value for would be 330kΩ ||||)
if they use neon the diode should go after this
or the R+neon goes in parallel to diode (indicating the "heating up") if it has a thermal relay at that side

do you remember when your light was bright dim ON OFF previously

see also (http://edi-ediscorner.blogspot.com.ee/2011/01/trick-to-pencil-type.html) -- with hv~ac you dont want just to solder the leads (melting off by sparking) but fix them by screws or terminal lugs

not the best but better than your current method