Converting GM from ext. to internal regulator

I am trying to convert my 66 chevy truck from external to internal regulated alternator. I have found varying resources on the wiring. I have taken the blue and brown off the voltage regulator and connected them. The blue then went to the #2 terminal on the alternator. I connected the #1 terminal to the hot wire at the battery lug on the back of the alternator. I find it is showing 14 volts at the battery when running, but the gen light stays on.

Now i'm really scratching my head!

 

Ok, that makes sense to me. I had some bad information. Thanks!!

 

It looks like I misstated the terminal numbers. I do indeed have the wires as shown in the drawing. However, I do NOT have 12 volts switched at the end of the blue/brown wire connection. Looks like I may be going back in side the truck to look for some gremlins!