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Your big wire is on the alt bracket, right? Scratch the paint off that bracket and see if theres corrosion on the bolt/ washer. I think I moved my wire to the intake manifold, but I put a serpentine kit on.
Make sure the alt bracket is grounded good. I had the same thing happen on mine and it turned out to be a bad battery cable. I cleaned all the connections and they were good, but the cable inside was all black corroded and it had enough wire strands still attatched to look good to the voltmeter, but it didn't have enough strands to move the current through it. If you don't have one now, get a star washer for it, they help.Put an ohm meter on the negative cable from end to end and twist and move the cable while it's hooked to the meter and see if the readings change. if they do, the cables bad.I'd go through and clean the connections. If a connection shows bad on a voltmeter, it's bad. If a connection shows good on a voltmeter, it may still be bad.Since it burned up the smalll wire, check your ground strap to the engine too. The ground strap goes from the very back end of the passenger side head to the cab.
Yes, this wire DOES concern me and i'm not going to do anything else until this matter is taken care of. The starter problem can wait.This wire branches off from the main, large battery negative cable. (second pic) The batt negative cable itself goes directly to the alternator bracket. (like i said, i am working on a diagram and it should be up shortly). i've been doing some reading and most likely the large, main batt negative cable IS NOT grounding properly to the alternator bracket, which is why the small wire is getting overloaded and burning up, so i've got to check that.i'm thinking during the engine swap i reconnected this wire to the alt bracket improperly (put washers in wrong order or something) or maybe the wire iself is bad.P.S. why did the factory use star washers anyway?
SUX2BU99: why would you ground the frame instead of the alternator bracket? The starter motor is the biggest current draw and its attached to the motor, not the frame??? Seems like attaching to the frame requires the current to pass through the frame and then into the motor through ground straps that weren't designed to carry that kind of load. The alternator bracket seems like the perfect spot (apparently GM agrees). If you wanted to add a second wire to the frame I could see that, but I'm confused.