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My field regulator spade is on the bottom blade of the alternator. My question is should the other blade be grounded?
Yes.
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With the key off I get voltage at the output lug of the alternator and no voltage at the field regulator blade. Key on I get around 10.5 V on the output lug
Should be at or damn near battery voltage. Check for high resistance between alternator and battery and/or faulty voltmeter.
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I have continuity from the field regulator connection at the battery over the to the other end of the wire at the Field Reg box.
I guess you mean "I have continuity from the field connection at the alternator over to the other end of the wire at the voltage regulator". Good, and how much resistance do you have between those two points?
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When I start and run the motor the Battery hangs around 12.2
Discharged battery.
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BUT when jumping the field regulator spade on the back of the alternator to ground I don't get engine load or a voltage bump.
Unclear here whether you mean the second/'extra' field terminal not currently connected to anything, or the active/in-use field terminal.
With one of the alternator's field terminals grounded and the other one connected to the alternator's output stud, you should see your battery charging. Don't rev the engine very high in this condition.
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Does the other blade need to be grounded on this alternator for some reason
Again, yes.
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Am i looking at a bad voltage regulator or bad alternator?
We won't know until you ground that second field terminal and run some more tests.
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