Just pulled the generator wire and noticed it sparks to ground. Is this right? Should this wire be hot with the switch off?
it goes to Battery.
I assume you probably mean the cutout wire that fastens to the screw terminal there. It should be a Yellow/black wire and yes it is hot all the time and if you short it to ground you can smoke your ammeter if you have not installed a main fuse. Consider installing a single 25 amp fuse in the heavy solid yellow wire that protrudes from the battery side of the foot switch. That is the main power to the car from the battery and ultimately what makes that yellow/black cutout wire "hot".
Thanks--that's how I read the diagram that I have on hand. Just wanted to be sure.