Re: 3.7 regulator.charge system
That motor and charging system is pretty known to do this if any one of a few things happen. It's so expensive and happens so often many people move to a automotive sytle alternator. Look around any you can find a kit.
Anyways, if the battery terminals are loose, or corroded, the regulator (reg) can burn up. If you disconnect the battery while the engine is running, she is up in smoke. If you try to double jump start the battery (two batteries in series instead of parrallel, she's done. If for some reason the regulator is not getting the proper water cooling...say bye bye.
I'm not sure that a shorted stator can cause the issue. The regulator just shunts energy not needed for the charging system through a power resistor to ground. The resistor and power MOSFET gets hot. The amount of energy it has to dissipate is proportional to the RPM of the motor and inversely propotional to the electrical load on the boat.