The 11 volts in to the VR 0is still a potential issue...
67dart273 will pointout that the voltage drop into the VR will result in an increase of voltage out possibly over charging the battery
Was the engine running when you took your measurements?
Has the battery been charged by a external charger?
If the battery is really discharged the alternator will try to charge it and pass a lot of current through the bulkhead connectors ( A body weak spot )
The alt in your photo seems to be a 2 field wire (isolated field ) alt. Grounding one field perminatly will work just fine.
I would double check with an ohm meter and both field terminals disconnected, that there is no continuity between either field terminal and the housing of the alt.
Also the cracks in the green (field) wire insulation could have broken wire strands under it. Fewer strands increases resistance which causes all kinds of problems
