Okay, if I am reading this correctly you have the cable that comes from the negative battery terminal attached to the bottom stud on the solenoid?
If so that would be one problem. That ground wire bolts to the engine block or at the base of the solenoid.
The cable connected to the top stud on the solenoid should go to the positive terminal on the battery.
The slip on terminal brings twelve volts from the key switch when you turn the key. That causes the solenoid to activate. Under the two studs is a copper plated disc. It acts as a big switch and sends battery power to the starter motor through the braided line.
The smoke is not a good thing. You will need to determine exactly where it came from as it may have burnt the coating off the wire(s) and could cause much worse problems. Start by fixing the wires on the solenoid. You can test it to see if it still works by using a piece of wire to go between the connector you added and the top terminal. That cuts out the rest of the wiring and the engine should turn over.
You will also want to add some tape or extend that wire enough to add an insulated connector. You do not want it shorting out again.
Find the area where the smoke came from next and come back with that information. We can then look at the wiring and try to determine what the failure could be.
Images (Click to make bigger)
SPONSORED LINKS
Wednesday, August 30th, 2017 AT 9:03 PM