Cleanup turns to mess up. Need some help troubleshooting.

Ok so here is where I am with tracing out this inconsistency with voltage through the ignition system.

I measured the red wire that comes from the battery to the ignition switch and its at 13V leading to the switch(dead center of the picture accompanied by one black wire in the connector).

The diagram version is pictured below and shows it coming from the battery through the firewall to the ignition switch on the right side of the page.


However once that 13v hits the ignition switch and begins its travels to the ballast the voltage starts to drop. The larger yellow connector centered in the picture above is where the dark blue wire carrying the voltage to the ballast makes a connection before running the last 12 inches or so into the firewall. The blue wire on the switch side leading into the connector reads 12.2V, as soon as it goes through that connector it drops to 10.5V and stays at 10.5 until it reaches the ballast. Ive measured it going into the firewall and coming out of the firewall as well as going into the ballast resistors and they all are same at 10.5V with the ignition in the on position. How would it going the ignition switch magically make it drop 2.5V on the way to the ballast? Also the silver capacitor with the yellow and pink wires in the middle left of the picture(closest to the camera) stays hot the entire time, is that normal?