The trouble with a discussion of this type is that everybody has their own understanding and or methods. Do what I said and you will not go wrong.
OK, along with what jeff R. just said, yes Mercury does run the charging circuit through the ignition switch. That is because selenium rectifiers are lousy at completely blocking reverse current, and leaving it connected will discharge the battery over time. Motors with newer, silicone rectifiers do not have that problem, so the charging current does not go through the ignition switch. Makes no difference when testing the rectifier because you have disconnected the wires, remember? FYI, selenium rectifiers look like a stack of wafers (like yours). Silicon rectifiers can have a variety of shapes.
Here is your wiring diagram.
