Thanks for the reply. A couple of questions remain for me.
Why would it test fine when unplugged from the rectifier yet not OK when plugged?
Also can I damage my new stator by running the bike with the faulty rectifier?
I'm no engineer, but here's my rudimentary understanding:
Question 1: If the stator is plugged into the R/R, then the flow of AC volts will be limited because as it gets to the R/R it is converted to DC, and then shunted to the main circuit as needed, and/or ground (if above the demand). This will limit the voltage seen in the wires since they are limited "down stream". With the plug disconnected, the full AC voltage produced goes through the wires and your multimeter to ground.
Question 2: I'm not sure, but I think so. Heat is the killer of stators. They "burn out" which melts the insulation which leads to a short. The stock regulator on these bikes shunts the excess amps to ground through a variable resistor. Anytime the flow of electricity is resisted, heat is produced. That resistance can cause a "back up" in the wires coming from the stator, causing excess heat in the stator itself. The stators in this bike create electricity from a spinning rotor around it. The earlier models (pre 2010 maybe) had a pretty solid back of the rotor which significantly limited the flow of motor oil which should help cool it. After replacing my stator 3 times over 5 years, I replaced the rotor on mine with the newer "swiss cheese" version (mine is an 08') and at the same time replaced the original R/R (which tested fine) with a series type (which uses a transistor as opposed to a resistor, and thus much less heat). I have not had charging system issues since.
This idea of electrical resistance is why certain size wires (or lengths) are needed for certain amp levels. If you try to force too many amps through a circuit that can't handle it, the resistance of the amps pushing through will create heat which can result in fire. Hence the need for fuses to limit amp spikes, unless of course you have a really smart computer that can shut down the circuits instead of fuses...
IMHO, if you plan to keep this bike a long time and will be doing long rides far from home, I would upgrade the R/R to series style. I wish I had done it many years ago.