I know my posts can get long so to sum up my question ahead of time: If the instrument panel battery lamp stays on if there is no key in the ignition and the alternator is not grounded correctly, is the regulator to blame or grounding/shorting of the warning lamp circuit D+/61alternator wire?

My wagon died over the weekend. I had a warning sign as I left my friends house 40 miles from my home. Car had sat for about 3 hours in 10-20F degree temps at night. The first complete stop I made after leaving his driveway the car died completely - all electrical went off and a puff of smoke/steam came from under the hood. One exception was that the battery light came on and did not go off when the key was returned to the off position/removed. It was dark but I popped the hood and had a look around with a lighter as a light source. I didn't really see anything obvious and the cloud quickly cleared before I could determine where it came from. I disconnected and reconnected the battery and hopped back in. The batt light was off and cranked over and fired up.

About 20 miles later on the highway I felt the power drop out and headed for the shoulder. I coasted off the highway and again the battery light was on, even after the key was removed. looked around under the hood again, I suspected the alternator/regulator failed and looked there first. I found that the ground strap had broken off the alternator and figured this was the cause. at this point I had already disconnected the battery and I crudely wrapped some exposed wire from the ground strap around the ground connection on the alternator. when I connected the battery at + a large arc jumped from the terminal to the connector. Again the batter light came on and engine would not start.

I have pulled the alternator (Bosch 70A) and found that the regulator failed. I have another known working alternator ready to go from my wrecked 83 but am a little cautious at the moment. My concern is mostly from the battery light staying on after the key was removed. I have not seen this before. From looking at the schematic, it seems like it shouldn't have come on when it did unless that warning light circuit was grounding out somewhere else (since the alternator wasn't grounded when the regulator failed). Before I throw in another working alternator, I would like to be assured I wont blow it out as well. Seems like I need to go through the wiring harness and check for shorts/grounds before I can have that piece of mind.

Any thoughts on the warning light behavior would be appreciated.
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'82 245 B21F-MPG (LH 1.0) 192k, '83 244 B23F (LH 2.0) 164k