I have an electrical gremlin that is staying hidden.  I have been restoring a '96 for some time and am finally in a position to get the engine running.  It's been sitting with fogging oil in the cylinder and fairly regular manual cranking to keep it loose.  

My first attempt to start resulted in smoke at the positive battery terminal and a very hot starter wire.  I pulled the side cover off, checked that the starter clutch was operating correctly, and tested the starter.  All good.  But, it fried the relay.

After installing a new relay, I checked all my connections, made sure I had good grounds, no frayed wires, etc., installed a new battery, and tried it again.  The same thing happened.

I pulled the cover off again thinking something is binding the starter, but it all seems fine.  I tried cranking the starter with the cover off, and of course my new relay is fused and as soon as I connected the battery, I had the starter and engine turning over, although very freely.

I'll try getting one of the relays to unstick but will likely need to buy another one.  Before I install it, I would like to know what else I should be checking.

Other information:  the kickstand switch is bypassed, the clutch switch is not, and the neutral light comes on.

Wow, I believe you nailed it.  I did indeed have a washer in the wrong place.

Thanks so much!

Well..