No charge

Penstarpurist said
Then when we go from flag on alternator to battery the gauge shows charging.

So if I understand what was done correctly, full fielding at idle speed produces a enough power to recharge the battery. yes?
(The flag terminal feeds the field.)

Penstarpurist said
We also tested the output at the battery as 12.8 and diminishes more when the headlights are put on, or a blinker. The charge falls away and headlights dim.

Try this above idle speed - say 1250 rpm. Also checking voltage at the regulator in (blue) and the alternator output (stud) will also narrow down the problem. It should be the same at all three locations.