>
> The ground wire gets hot, melts the plastic
> sleeve, touches the 86  (+) wire and short everything.
>

This is backwards.  The ground wire from the relay only carries about 200
milliamps -- a 24-ga wire would be more than enough electrically.  I think
your insulation chafed against the 86 terminal and shorted the wire to that
terminal, causing meltdown the next time you run the headlights.  That line
is not fused -- all four fuses are downstream of it.

Yrs,
d