1...What are you talking about "ballast is not needed." IF you have a Mopar electronic ECU it IS needed
2....WHY don't you think it is the switch? Have you checked it? And how did you?
3...Now you have me entirely confused. "Middle blue wire is grounded?" I don't know what a "middle blue" wire IS Maybe you are referring to a LATER (70 later) alternator WHICH IS ISOLATED FIELD and has TWO field connections, and if one of these is used on a 69/ earlier car WITH ORIGINAL old style regulator, you would ground one field, and connect the remaining alternator field terminal to the green wire going to the VR field terminal.
You need to drop over to MyMopar and review how the older and the newer regulators are connected. Are you using the 70/ later "flat" electronic regulator? If so one field is connected to switched 12V "ignition run" voltage and the remaining one is connected to the green VR wire
