79 kz1000b electrical

I got a problem, looks big.  First bought a basket case kz1000b with a cafe style start. Got it running and finalizing and I have a new wiring problem. I had to repair the wires from engine ignition to coils and relocated battery, starter relay etc. I thought I wired my starter regulator wrong. It was off for awhile and has been relocated. Here's what's up: Tail light low and flashing, right coil hot, smoked wire cant find-maybe right coil?, main fuse melting contacts in box, brake light on steady.... is that a grounding of a power wire I cant find? I have a wiring diagram but the posts to battery or starter are not indicated for the starter relay and the two wires leaving it I thought I got right. Is it that coil fire wire repair? I cant find it I also added an extension to both starter and frame ground as the battery was relocated. The ground does contact the pan that all electricals are in. Does that affect anything, I assumed not but is anything supposed to be isolated from a metal surface?

I may attempt to help.
I just need to sit down and have a couple coffees.
Fixing a previous owner's custom wiring is a
new level of frustration.

I have to dig up a schematic as well.

Are you sure it’s a “B”. schematics are different for A’s and B’s. I should have the B3 supplement and a schematic.

This is gonna be a ton of fun.There is a yellow/black wire that goes to the ground terminal of the battery.Double check you have that connected. 

Schematic courtesy of loudhvx