Could a short on the engine side of the harness cause this kind of short? If so, wouldn't the black wire to the alternator be cooked as well? Are we guessing the short is on the engine side?
Looks to me in your pictures that the black wire is melted too, it may not be melted all the way back to the alternator, but that wire is not hooked only to the alternator It feeds the fusebox as well.
In order for it to melt the current had to flow thru it, so yeah, your problem is somewhere on the engine side of the ammeter, assuming stock wiring setup.
They say there are no such thing as a stupid question. They say there is always the exception that proves the rule. Don't be the exception.
