To have the small black ground get that hot, (2) things must occur.
(1) the main large ground cable to the engine is not making good contact and
(2) something is shorted causing the small black ground wire to be overloaded.
I'm thinking the alternator was the cause of the short but what about the fusible link that is designed to prevent this very problem.
Have any of the fusible links been bypassed? This car has (3). Make sure the fusible links are installed as designed.