I have a bit of a problem with the replacement alternator I just bought for my 1986 240 DL wagon. On the orginal, there was a small post on the lower left corner of the back that had a wire connected to it. This post is not on the new alternator. The wire end is a small loop with a red collar, suggesting a positive line. The wire runs under the oil filter and appears to bolt to the engine. The post on the original alternator looks like a simple extension of one of the long threaded bolts that holds the housing together. If I didn't know better, I'd say this was a grounding strap. Question is, what do I do if I can't connect it to the new alternator? Isn't it already grounded through the mounting brackets?

If you have the Haynes 240 series repair manual, you cna see the post clearly on page 5-19, picture 16.4a on the lower left.

The alternator is mounted via rubber bushings. Therefore, it is not self-grounding. It needs an external ground wire.
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'73 142, '75 242, '75 245, '80 245, '83 244, '86 244, '87 745T, 92 244 (for sale)

Thanks Evan - are you saying that this is a ground strap? If so, it should be OK to bolt it to any point on the alternator body? Just want to be sure.

Thanks!

Yup. Anything except the positive terminal! :)
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'73 142, '75 242, '75 245, '80 245, '83 244, '86 244, '87 745T, 92 244 (for sale)