That would do it. According to the S80 wiring diagram, the wire from the starter should be the hot from the battery so if it shorted to the case of the ammeter there were probably some sparks. You mention the post to case is an open. Check the condition of the insulator on the ammeter post and then check the posts of the ammeter with your ohmmeter to the case while wiggling the post and see if they short, just in case an insulator was damaged. Found the sound of it, the wire from the starter to the ammeter would have taken the current surge. Any damage to the ammeter would have been from heat. It sounds like you should replace the wire, check for shorts with your ohmmeter and then see how things work. Possibly your ammeter is OK.
The right post looks like it has a nut or spacer under the the wire end. Was there one on the left post? If that is missing, the wire end would be closer to the case possibly allowing the short to the case. Maybe the extra voltage from the 12v jump was enough to initiate the short.
Judging from the wire in the upper right of your photo, it would be a good idea to check the condition of all of your wiring.