From what you told Jim it HAS been converted to an alternator/ Was the proper "isolated" unit used? If it was an "off-the-shelf" 24 Volt unit made for a system that did NOT need an isolated case alternator it could well be the cause of the spark you are seeing at the mid point of the series batteries grounding wire.
You ask "Is there a way to check the isolation of the starter, solenoid, regulator, and generator?"
First thing we have to know, FOR SURE, does it have an internally-regulated alternator, or still the original generator with external regulator?
Basically, one would disconnect the batteries, then each individual component in question and check for conductivity (with an Ohmmeter) between it's (-) terminal and it's metal case, and it's (+) terminal and it's metal case.
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Today's Featured Article - Memories of a Farmall C - by Monty Bradley. When I was a child, my grandparents lived on a farm owned by a Mr. Walters. The crops raised were cotton and soybeans, with about forty head of mixed breed cattle. Mr. Walters owned two tractors then. A Farmall 300 on gasoline and a Farmall C, that had once belonged to his father-in-law, and had been converted from gasoline to LP Gas. Many times, as a small boy, I would cross the fence behind the house my grandparents lived in and walk down the turn row to where granddaddy would be cultivati
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