I need to figure out how the electronics work on a 1989 kawasaki ts650.

I bought the machine knowing it needed a stator and a battery. The po said it ran when he last used it but that had been a couple of years. So hooked up a battery and gave it a compression test 150 both jugs and it did have spark. paid the man and took it home.
Ordered an new stator and got to work removing the old one. This is my first jet ski but I have worked on lots of other stuff. pulled the motor to get to the stator this is what I found when I pulled off the flywheel


wow canít believe it would even spark the plugs
flywheel was burnt in only one spot.


replaced the stator and cleaned up the flywheel. when I got it all put back together and was hooking up the battery I noticed it sparked a little when i tried to hooked it up. There should not of been any draw on the battery . got out my volt meter and checked battery voltage 12.7. momentarily hooked up battery voltage went to 11.4. dead short somewhere. disconnected starter from solenoid no change still a short. disconnected stator from voltage regulator short went away.
so my regulator has 5 wires coming out of it. 2 tans for the stator 1 red from the positive side of the battery terminal on the starter solenoid and another red with a stripe . plus a black ground. all leads except the black have 12.7 volts on them when the battery is connected. now I know why the stator was fried and the flywheel was burnt in only one spot. so is this a bad voltage regulator or something else. i donít really know how they are supposed to work. I donít have a manual and I know its not right . any help would be greatly appreciated.