Ok so here's what I saw.
Starter failer:
-starter gear stripped
-flywheel not stripped
-bolts where tight, no shims had fallen out (had 4 shims, I've read somewhere should be no more than 5 total)
-starter was a Delco gear reduction type, (more torque than a direct drive? Not sure on that)
-no provisions for a support bracket, so there was no bracket installed
Possible cause of failure:
Starter creates to much torque during cranking, the number of shims and no support bracket allowed the starter body to flex away from the flexplate and over time wear the gear down untill it stripped out completely. Gear lash was in spec when I installed it.
The new starter (a direct drive unit) has a support bracket, only 1 shim, bolts are torqued to spec, gear lash is in spec. It is working good so far.
Damaged wires:
-no heat shield
-wires were routed too close to header even tho they weren't close enough to flex and touch
-the loom was soaked in oil from a previous leak.
-no protective header wrap to help dissipate heat.
Possible cause of failure:
The previous oil leak soaked the loom in oil which over time soaked into the insulation of the wiring, degrading the material, along side being in the same area as an object which radiates high heat. The heat cooked the the oil which burnt the insulation to a crisp, destroying the wires. The exposed wiring turned gear due to exposure to atmosphere which could be wet or damp at times, oxidizing the exposed area.
The header now has heat wrap around the entire starter area, the oil leak was fixed, the wires routed with more air flow and room between them and the header, all of the oil soaked loom was removed and the wiring cut back where it was still good and repaired and reloomed.
Best as I can tell, that's what makes the most sense to me.