I got it down to SSC today

I havn't heard their take on it yet, but looking more closely at the dammage, here's what I think happened:

The battery tie down closer to the driver must have been rubbing on one of the bundles of wires that emerge from the wheel well and make a bunch of connections right next to the battery.
One of those wires must carry a pretty stiff +current: the tie down connects to the chassis, which is grounded to the battery's cold side. Thus the tie down became a big resistor in a high-current circuit.... roasty toasty.
I think the glowing tie down set the plastic insulation of the wire bundles on fire, and also burned through the battery (causing it to burst)

It seems like the folks at SSC are going to take care of me. I can't say enough good things about that place... I'm just concerned that it might take a while to get the work done... lots of little wires with burnned ends...

I'll keep you posted (pun intended),
Maniacal Miscreant

 

Yeah, subaru of santa cruz will definately take care of you.

That was a very large factor in buying the STI.