Grounded Alternator?
 

I found the battery dead in my '94 GMC 3/4 ton 4wd 350cid. After I charged it up and put the battery back in, while I was connecting the cables I got a big spark. After hooking the three wires going to positive one at a time, I found the wire causing the spark (grounding) was the one to the alternater. Had the alternater tested, bad, got new one and hooked it up and the same thing happened, sparks. Anybody have any ideas about what's causing this?

I think you should have the alternator tested. If this is the wire going to the B+ termanal on the alternator you have a shorted diode in the alternator.

The trouble seems to be in the lead going the "charge indicator" then to the "hot n runbulb test or start guages fuse". I tested for continuity between the battery lead connection of the alternator and ground it was open, but when I tested the lead going from the alternator to the above mentioned it was grounded. So I'm going to see if I can find where that wire goes and see if it got grounded somehow.

Now I'm thinking to myself, what an idiot. Of course there's going to be some continuity when testing that wire to a light. So, I'm back to the alternator, there is grounding between the battery post and the body of the alternator and I can't see any possible grounding around the post. It's a new (rebuilt), and as hard to believe as it is, it seems to have the same problem out of the box as the old one.

If you take the lead off the alternator going to the indicator light it sould not be grounded. The ground (or low voltage side) for the light comes from inside the alternator thru the sensing and switching circuits. When the alternator is putting out normal voltage the voltage to the indicator is near 12volts thus the light goes out.

If you have a Chilton or Haynes manual they have the troubleshooting method to use to check the circuit out. With the ignition switch on and engine not running the indicator light should be on. Disconnect the harness (termanal L) at the alternator and the light should go off. This will tell you if the indicator light circuit is OK.