Hokay, had the alternator rebuilt for $110....new diodes, regulator, brushes and bearings. The outer case got hot-tanked and bead-blasted too. All problems solved! The shop was fast, 3 hours, and VERY cheap for the quality of work they offer. For anyone who is in the Bay Area, I HIGHLY recommend:
San Jose Generator & Starter
40 San Jose Ave
San Jose, CA 95125
(408) 293-2200