Ralph,
On the earlier trucks with ammeter, the wiring from charging system including the wires to the key switch and anything else is located on the - or discharge side of the ammeter. The starter and battery on connected to the + or charge side of the ammeter. On these trucks, those connection posts are directly behind the dial notations for - and +.
I don't know about your '58 but I would have thought the wire from common starter lug to ammeter would have been connected to a post behind the 'charge' side of the meter. Even is connected backward it would only result in the ammeter reading backwards and shouldn't have resulted in chaos.
I agree with you, it was a slow short...a high resistance short. I'm not a expert but would think the area that caused the short would be the most black, burnt and fried..just like the weld pool of a MIG or stick welder, it's where the action was.
If the battery is the source of system power then current was flowing from battery, back up the system where it sound a path to ground. This path took it to the ammeter but not through the ammeter.
Stuart