Several possible wiring diagrams attached, I would recommend replacing the drum switch for a 3 way maintained ON-OFF-ON rotation switch and using momentary run commands. Switches that have been previously used for 120/240V switching often arc and the contact resistance can be a problem with the VFD low voltage signal switching. VFD signaling and external speed pot wiring can be 18-22AWG, power and motor wires are sized to the Hp rating (usually 12AWG for input power, 14AWG motor power for a 2-3Hp VFD). The VFDs usually need some basic programming, unless you use the simple 2 wire control.
A few VFD models to consider, my recommendation would be the Teco N3 or Hitachi NES1-015SB + NES1-OP
Teco 2 HP, 230 Volts, 1 Phase, IP 20, Teco, L510-202-H1-U
http://dealerselectric.com/L510-202-H1-N.asp
Hitachi 2 HP, 230 Volts, 1 Phase, IP 20, Hitachi, NES1-015SB + NES1-OP
http://dealerselectric.com/NES1-015SB-NES1-OP.asp
Teco 2 HP, 230 Volts, 1 Phase, NEMA 1, Teco, N3-202-CS-U
http://dealerselectric.com/N3-202-CS-U.asp