The voltage regulator is inside the generator and won't even turn on with reverse voltage. What WILL be damaged are the six diodes inside the generator. Those are one-way valves for electrical current and are in the circuit backward compared to the battery. Those are what keeps the battery from being run down by a direct short when the engine is stopped. With the battery hooked up backward, those diodes are "forward biased" and become a dead short. There will be some type of fusible link wire between the generator's output terminal and the battery, and that may be what you saw. However, ... Fuse link wires have a special insulation that will not burn or melt. That might be something else you saw burning.
Those diodes need to be tough enough to pass the generator's maximum output current. For a '78 model that is typically 65 amps. When they're forward biased due to the battery being connected wrong, there is nothing to limit current flow. It can be more than high enough to short the diodes instantly. If the battery is connected properly now, measure the voltage on the generator's output terminal. This will actually be more accurate in this case if you use a test light instead of a digital voltmeter. If you do not find voltage there, replace the generator, then look for the burned fuse link wire. Fuse links are short pieces of wire spliced into the circuit they protect. They're a smaller diameter wire with insulation that won't burn or melt. You test them by tugging on them. A good one will act like a wire. A burned one will act like a rubber band. GM typically uses the battery cable terminal on the starter as a tie point. You'll usually find one or two fuse links coming off that terminal.
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Sunday, October 26th, 2014 AT 9:10 PM