Looks like it was arcing on the back of the tire.
I wanted to duplicate the arcing behavior so I ran it 20 minutes, and forgot the mirror inside....When the symptoms came back they were fresh ones from the mirror falling between the 11'oclock outer edge of the fly and the cage. Mirror silvering is conductive so all it had to do was melt the plastic edges of the mirror.... After removing the mirror it wanted to arc from the mirror contact point on the tire so I ripped enough off the tire to help, and put a piece of plastic (seen in the last tireless shots) in there to block the spot in the cage it wanted to arc to.
I then ran it for almost 2 and a half hours watching it closely, and periodically putting my ear next to the cage to listen for bad noises in hopes the blackened back top of the tire would arc to prove my theory that it was the cause of yesterday's 1 hour arcing.....Nothing happened in those 2+ hours! It worked fine. The tire was warm at the end and some external wax was on the edge of melting/slightly melty, but the only reason I had to shut it off was because I was summoned by the folks for a menial task.
I pulled off the back charred section, and came to the conclusion the tire was so loose it might as well be removed entirely. I'll get some silicone tomorrow and give it a new coat.
Here is what I got out of the 20 last night, but forgot to post.
Thanks for allowing me time to get it right. I have been pushing to get it done since there is other stuff (my stuff, and others') I want to work on, and honestly I can see why you were/are not a big fan of this set....I'm sort of tired of pouring my energy into it only to find the next thing or get lack luster non-proportional improvements.
It's darn fascinating working on these chassis and seeing what they are all about compared to others I've seen/worked on, but now my curiosity is sated and from this experience I can say I don't think I'll ever actively seek out another CTC-16 or 20....These sets remind me why I'm (mostly) a Zenith man.