charging system trouble

Yes this is too much voltage at the battery ... the 'water' on the top of the battery is acid and is from the cells boiling with the overcharge. Don't keep driving it or running it for more than a few minutes 'til this is fixed! The battery could be damaged/ruined, and at worst, a few have been know to crack open if too hot, spilling acid everywhere.

It could be due to voltage drop as 67Dart273 is having you test. It could also be improper wiring to the alternator or a ground not being where it should. When you say the alternator is a '2 terminal', do you mean 1 big terminal (for the power output) plus 1 small terminal on the back (from the regulator, for the field), or do you mean 2 small terminal s on the back along with the 1 large power output terminal ?