Ray
I'd agree that the screwy readings may be a result of not revving to excite the alt. the first time around. I got much more normal reads today after revving it today. 12.5-13.8 at coil, and 6.5-6.9 across coil. This is my first experience with a "one wire" set up. The '68 and the diesel both have standard three wire rigs.
The battery is 12 volt.

Southtowns
Thought about tight valves last night, they seemed fine but backed ALL of them off a half turn. (the intake as well as exhaust, if that makes a difference). It didnt change any of the symptoms.
I retained the old external regulator since it seems to feed power to the horn relay, and harness to the fuse block.

Wrenchbender
I will check the lean fuel condition tomorrow. I do have a ground wire from top of therm housing to the top bolt on old regulator. Hadnt thought of running one from engine to frame, as I assumed it was grounded thru motor mount points. I will run one as well, for peace of mind. I will check the exhaust valves again.

52pu
I cannot say how much creep there is, as it begins to go past 180, (182-185) that where the problems begin, and I shut it down. The concern I have, is 165* enuf to fully pull the choke off? Obviously, my first experience with water choke as well.

I should mention, that all of this is taking place in the garage. Not out on the road under an actual load. With a stiff 55 mph breeze blowing thru the radiator, the creep may not even be occuring.

Thanks all for your help, Tony