Just measured voltage from battery positive to ign at voltage regulator with key in run. 4.0 volt voltage drop.
if I have a 4.0 volt drop in the ignition, and my measurements on the black wire at the bulkhead are 12.5 inside the engine bay and 8.5 inside the cabin, is it that specific connection that is the problem?
Yes and you have to "chase it." I outlined "the path." Check at the bulkhead, the key switch connector, and through the switch, and any other terminal. You do have a wiring diagram/ shop manual?