No idea... I pretty much pulled that out of my ass. :spam::laugh2:
Good on ya for admitting that. That is a waste of time as you will read zero ohms (dead short) even if the cable is pretty much in tatters.
However, if that neg lead was smoking, it needs replacing. It may not be the cause but it is a side issue that needs repair. Replace it (take it out and take it to Napa and they may well have a premade one of the correct length). If in doubt, go shorter than longer as long as it will fit. If that fixes it, great, if not, listen to what most are saying and bench test the starter.
Take it out and just use jumper cables and any old battery. Hold it tight though coz if it's good it'll jump on connection.
Not sure on those starters but often the bushes are accessible by big screws on the side at the back. And I would agree with others about about worn out bushes or a commutator that needs a clean. If you're not comfortable dealing with that, take it in and get it checked/overhauled by someone in the know.
It could also be bearings are f**cked from water injestion, or the starter is out of alignment. They would stop the starter turning properly and cause it to draw maximum current, which is making the weakest point (neg lead) smoke.
Good luck.