The idle surge is actually telling you the idle switch is GOOD. Why? Because too much air (faulty BISS, Leaky FIAV, Incorrect Idle adjustment, incorrectly adjusted CLOSED THROTTLE SWITCH, etc) is getting injested. When this happens, the ecu has two things it can do. 1) Add more fuel to match the air coming in or 2) shut fuel/spark off to drop the revs. If you notice, with the switch unplugged, the idle stabilizes but usually HIGH (correct me if I'm wrong) because it thinks the throttle is open and you want to GO! so with the added air, it just matches with fuel as if you're driving normally. With it connected, it knows that you're not applying throttle. When this happens, you get a condition caused by the ecu itself (idle surge) because it thinks it shouldn't be reving above a certain point (the point where the idle drops during the surge).
This is how I understand it and may help you understand why you need to invest a bit more time in troubleshooting other areas to cure this. VFAQ's are great tools. I personally would start with a boost leak test. It cures many ailments and can save you time later on by preventing what would have been an additional problem.