[cooperino]

Bob.

When it comes to electrical the rule is "divide and conquer" For this to be happening it must be something that pulls a good amount of current like the starter. Look at all the wires between battery and starter. Also look at all wires going to VR. What I find to be peculiar is that your battery seems to be fully charged. You said the positive wire was on but loose. A short like that would have normally killed the battery.

Edit.
You said you have the fenders off. You had the battery out?? Is it at all possible that your hooking the battery up backwards? Just saying that would cause a short like your talking about.