Yes, the ground reference is through the metal case of the regulator to the chassis ground. Good way to check it is with a DVM, check continuity from the VR metal case back to the negative post of the battery. Should be as close to ZERO ohms as possible. If you can zero out the leads of the DVM prior to making the measurement, it will be even more accurate. Alternate method is to use the VOLTAGE scale of the DVM, same connection points only you are reading millivolts instead of ohms. Again, as close to zero as possible is best. If you see much in the way of Ohms or millivolts (depending on which test method you use) then your VR ground reference is not really at ground.
For the ignition voltage input reference, use your DVM to accurately measure the battery voltage across the battery posts. Then measure the voltage at the VR ignition input terminal and the battery negative post. Compare the two measurements, if much of a difference between them you probably have some corrosion at a wiring connection somewhere between the battery positive and the VR. If there is much of a voltage drop, this will cause the VR to increase the alternator output voltage like you have been seeing. And since it is intermittent, it is most likely a wiring connection or the ignition switch itself. Only methodical step by step troubleshooting will find it. Throwing parts at it only wastes money and seldom corrects the actual problem. Good luck!
