Hy Hot Rod Dad, I'm a retired mechanic, not an electrician, but it seems to me that once your relay is activated, you now have two paths to ground for all the alternators output. One through the distributer, limited in flow only by the current carrying ability of the relay contacts, and the other limited only by the size of the wire. As you stated the factory used a fusable link in the circuit to the H.E.I., did the H.E.I. installation instructions talk about fusing the circuit? If it were me I would take the power from the horn relay battery terminal or the starter battery terminal, and stop funneling alternator output through the distributer. As to the alternator failure, you said it was an old one, maybe the field windings, or stator windings finally shorted, hope that helps.
