AK Model 42 Transformer Ground?

[Winky Dink]

I have an Atwater Kent Model 42 in about a dozen pieces, ready to reassemble and rewire. While I'm fitting the power transformer into the power unit case, I realize that I have no ground lead as shown in the diagram.



I have the other 12 leads properly identified and voltage-tested, but I think there should a separate lead to ground--I can't see any other way that the transformer would be grounded. I've been staring at the transformer for several weeks, but the solution has not appeared.
So, perhaps I broke off a copper-wire lead and can't find it?



Another question: What for is that reddish fabric strip (upper left)? I saw a photo somewhere that explained why it was there, but I forgot the answer and can't find the photo again.