Mike,
As doc41 pointed out, excess current flowing through the wire will heat it. You mentioned that this 'wire' is silver...a strange color for a wire. Is it an copper, insulated wire.
Wires are rated for ampacity. Big ones will carry more current than small ones. If a wire is undersized for its application, it will heat up, and can actually melt the insulation off.
If this wire feeds the ignition switch, I wonder if it now is toast. It has a maximum rating too.
Was the key left on by accident...I think it has a different OFF position than most folks would be used to. If the flow of power was from that terminal on the regulator, through the wire and ignition switch, I wonder where it was headed?
Unless it was a 'short', then power was flowing because a switch was closed and a device was using the power.
If a key is left on, the ignition system will use power. This can cook a coil and burn out points. Will the engine still start. Good luck and keep digging.
Stuart
