There should be 2 wires coming from the alternator (under the flywheel) these wires should end up at the rectifier/voltage reg. where a 3rd wire should be coming from and going to the bat. circuit.
Good luck - FYI, John Deere will sell you a wiring diagram.

I don't have a schematic, but-
That sounds like a coil "kill" wire, which I would expect to be grounded with the key OFF, and NOT grounded in the run position.

Thanks for the information. Got it all figured out except for the white wire. It's grounded, but in both positions on or off?????? Going to poke around some more maybe I got a bad stwich or circuit board????.
I'm fixing any little problems I run across also. When I took the PTO clutch off from the crank I found the wires had been chafing the drive belt. Caught it just in time Bare wires on both wires was showing. patched that up.

It would typically be connected to the M terminal of the ignition switch.
That terminal is grounded with the key off to kill the engine.
HOWEVER, a SAFETY SWITCH (seat? or PTO???) also grounds the SAME wire to kill the engine. You are probably reading the "ON ground" through one of those safeties.
See what you get while seated, first.

thanks bill, you were right on. Had my wife set in the seat and sure enough with key on it was not grounded. Thanks, Now I'm ready to remove the old engine.