OK, if the cutout is closing, you're developing voltage from the generator. The wires on the back of the ammeter need to be reversed to show "charge" when the cutout closes. You still haven't given me any voltage readings to work with when the cutout closes, so any advice I can give you about settings is a wild guess, particularly since there's apparently no way to measure amps. Unless the idle speed is VERY slow, the cutout shouldn't reopen at idle. Is the arc at the regulator points really severe, like a dead short, or just barely visible? it's possible your cutout relay is set way too high, but unless you can figure out some way to report on actual voltages while these things are happening, We're not going to make much progress.
Jerry
