With the reg unpluged you should have battery voltage at the blue wire at the alt end and the reg end, with the key on. The reg case has to be grounded to the body AND the engine has to be grounded to the body.
I do (even though my blue wire is actually a Green Wire).
Regulator has a dedicated Ground Wire running directly to the battery (as do the lights on the truck, and the aftermarket ignition, and the wiper motor, etc)
I have a 0 Gauge Ground Cable connecting the Battery to the Engine & Battery to Frame. and 2 Gauge cables connecting Engine to Body and Body to Battery. Most of the wiring is extremely overkill on this truck.