I have the exact same symptoms that Ben mentions above. This all happened after changing the wire harness on my 70 Chevelle with a new one. Same thing, the white/orange fiberglass insulated resistance wire that started to smoke and get hot after having the ignition turned to "ON" (not start). I did this to to check voltages and operation of accesories. I'm not so sure until I go to the car today (25 miles away at Mom's garage) but I think I remember my old harness resistance wire being cut short, this one is quite long. Also, I measured about 1.8 volts at the coil, is this to low? I'm thinking the excessive length of the wire is creating to much resistance increasing the current and causing the heat to dissipate in the wire resulting in smoke. I'm real close to cutting this wire down in length but don't know what is typical for a voltage at the coil terminal where this wire attaches. This is NOT a points type distributor, personally I don't think that has anything to do with the problem. I ran a search for threads on this topic and this was the most related topic. Any ideas....should I cut the resistance wire down? If so what resistance am I looking for? I am using an MSD Blaster 2 coil and a Billet MSD magnetic distributor. Oh, one other thing, the distributor was not in at the time I turned the ignition key to "ON". I will be dropping it in this afternoon.
I'm also going to e mail Ben to see what his fix was.