I had put in a 130 amp alternator on my car with a defective voltage regulator. I had to disconect the output form it so it wopuldn't fry the elecrtical system. I tried to get it to a gas station and the alternator cought fire kinda like yours. I had the hood open and it was more of a flash then it went out. I don't know what I would have done it it had not gone out. I went out and bought an extinguisher later that night.
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-1993 Mustang, 900rwhp 03-04 cobra based 4v swap, full Griggs setup, project underway
-1994 Ranger w/ 427cid windsor (daily beater)
check it out!
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