Somethings bad?

Ya,you got a mess there!I would definatly buy a harness.Amp guage still hooked up,get rid of it in the process.Wire your Msd independenly from everything else,(power wire to battery,trigger to starter relay then toggle,or both)If you have a problem you dont have to go through everything else to
find it and you dont have your ignition running through all that old wiring.Honestly,i have never seen a Msd melt things down like what you have,almost has to be something else to cause it.Check you bulkhead wiring as well.

Do a search on wiring,there are a few aftermarket harnesses available discussed on here.I wired mine strand by strand,time consuming and overall probably not worth the effort but i dont have a stock dash so i would have had to done it anyways for the most part.