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"Just a reminder when I removed the alternator a couple of days ago the red (ground) was cut clean through."
The thick red wire from the alternator to the starter and then on to the battery is the +ve wire and should end at the +ve post of the battery. It is not a ground (-ve) wire.
"test light connected to the + of battery. Light comes on when tested at other grounds"
As it should, as current is flowing from +ve to -ve (or vice versa) through the light.
"Light does not come on when I touch any part of the alternator"
It should. Which indicates the alternator isn't grounded. Run a test jumper wire from the alternator body to the block thus grounding the alternator. Check to see if dash lights come on and go off as they should (and system charges). If so, then the short grounding wire from the alt to the bracket needs examining.
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1980 245 Canadian B21A with SU carb, M46 trans, 3:31 dif, in Brampton, Ont.
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