Okay..
some things I need to VERIFY, first:
1. HOW do you know the alternator is good? (you mentioned the "correct charge" but nothing of how you obtained it, and if you tested through a load, or at idle, etc)
2. the short is not any more likely to be in the gauges than the battery, simply because of the finnicky needles, and wipers. that is simply an effect you receive when the voltage is at an extreme low. That would happen if the problem was not in the gauge area, as well.
3. You placed a test light across the open created when you removed the postive cable. (from the positive cable, TO the positive terminal of the battery. in essence connecting them back together, through the test light. The light illuminated because you had voltage running through it.. not because of the presence of a short, etc...
I would do the following:
VERIFY alternator and battery condition/operation (perhaps at a parts store, where they can test under a load, etc) and make sure they test under a load, and not just at idle.
While running: 14-14.7 volts across the battery terminals.. same at load, shouldn't drop at all.
While off, and with surface charge removed (all interiors and headlights on for 60 seconds) the battery should read 12.0 or higher.
if its lower than 12.. bad battery. (or PERHAPS a SERIOUS draw, but that would likely cause an off charging voltage, too)
if the charging voltage is low, then look in to those reasons (poor connections between the alternator and battery, etc)
Ray
