John, based on my own '85 911 alternator/reg. and being electrical engineer...

My quick take on this is bad regulator if you are accurately reading 16V+. It should be ~14.3V and constant with RPM. 16V will fry the battery fairly quick and yes the battery will get hot. I will guess the alternator is just running full bore, but should be OK.

That said wiring can be an issue. On mine the reg. terminals are all different sizes so hard to screw up. One of these wire goes to ALT light, another small one 'may' go to battery as a voltage sense wire (avoids I-R loses in thick power wire). If this is so, when the sense wire opens full alternator output will be delivered.

I did lose the + terminal on my battery at highway speeds. Engine just died.

I saw recently an a new battery destroyed by bad regulator. It was under hood type and was hotter than the engine. It had open circuit.

Thanks everyone. I am scheduled for a track day at Eastern Creek on Monday that took a lot of "engineering" at work to get the day off so I can't reschedule. So I opted for a new $825 AUD alt from a local source (yes, that's the same price as one from from our sponsor) and will be seeing if indeed the regulator was bad. Will report progress....

Thanks again everyone, really appreciate the time you took to help me.