Help on fault finding on a C3-31 Hammer combination machine

[m_c]

There is nothing in the diagram that indicates why the contacts 1 & 2 would show as having continuity, however the other two main contacts could, so it's probably a discrepancy between the diagram and the actual machine.
As Eddy says, you should only be testing for continuity with the wiring removed from the contactor.

[EddyCurrent]

The rotary switch (10) has 4 positions.
1. Saw
2. spindle moulder forward
3. spindle moulder reverse
4. planer

It's hard to see why there should be the difference in readings across the contactor as the assumption is that switch 10 just swaps motors.