Follow the melted wire. The source of the current will be at one end of the melted section and the short will be at the other.

Glad your car didn't combust. Many fine cars (mostly British!) have met untimely demises due to bad wiring.

I had a near death experience a couple of weeks ago in my 544. I as sitting at a stop light at night when suddenly the engine quit and everything went black. Then burning insulation smoke filled the interior. I turned the key off but more and more smoke poured out from under the dash. So I opened the hood and had to yank a battery cable off with my bare hands. Then wait for traffic to clear so I could push my car out of the left turn lane across two lanes of traffic and onto the side of the road. POST MORTEM: The aftermarket ammeter was held onto the metal guage frame by the same two bolts that the wires hook too. There were a couple of dinky plastic washers insulating the metal bracket from the posts and wires. One wire was perhaps a little loose and the connection heated up slightly, melting the plastic washer, allowing the post to come into contact with the bracket. ZZZZAAAAPPP! Direct 10 gauge wire connection from the ammeter back to the starter/battery cable connection. I rewired it and put in a 50 amp fuse down by the starter. If I hadn't been able to yank that battery cable off the car could easily have burned up.