The stereo was on at the time the defrost switch was turned on and was working while its wires were smoking. Based on the condition of the burnt wires it wouldnt have stayed on much longer.
I dont know if i noted that on the stereo harness both the battery wire and accessory wire had in line fuses that did not trip.
Now it's getting weird. The harness supplied with the stereo should be rated for its current draw, yet it melted down. And that takes a high current, yet the supplied fuses didn't blow. And the stereo continued working while that high insulation-melting current was travelling on those wires, so it's still getting a voltage it's happy enough to work with. With correctly speced wires, such flow starts with a voltage difference which is typically a Positive supply voltage (or a high enough drive output) shorted to ground, either directly or through a rather low resistance path (like a defrost ribbon); which typically drops the available voltage -
yet the stereo kept working. And if the stereo's rail voltage dropped enough that the volume dropped, it wasn't enough that it was noticed (or didn't seem material?).
Have you checked the in-line fuses in the stereo harness to see their values, and if they're actually fuses and not placeholders?
I wonder if your defroster switch switches positive, ground or both. If you look at your rear defrost ribbon electrical attachments, do both wires look like they're wires returning to the front of the vehicle, or is there perhaps one that is attached to the body there for a ground? (at one of the hinge bolts?)
In your photo I'm seeing a melted blue wire and a melted orange wire, yet there seems to be a third collection of strands in that mix. From your drawing in another thread, under
From Stereo I'm seeing Red - ACC/IGN, Yellow - Battery, and Blue - Power Antenna, and a Black - Ground. Is it correct that ACC/IGN, Power Antenna and Ground melted? Do you have a photo of that harness that shows all sections that show damage, even if minor?
(It's almost as though the Defroster circuit somehow managed to pull both Positive and Ground off of the stereo's Positive and Ground rails..., running both stereo & Defroster in parallel through that stereo harness.) Lots of fun, as we're trying to determine what caused the problem, vs. what problems may also now present after damage from that high current flow.
Headlights: confirm that when the switch is pulled out, neither low headlights nor high headlights work? What about the parking/running lights? Dash/instrument lights & dimmer?
p.s.
On searching under the dash.
Before you start that search, you should check the high/low headlight switch (not its lever) and the fuse box.
You can pull the connector to the high/low switch and check continuity of the switch in both positions; hope the switch is already adjusted to the lever's travel properly.