To get an idea of what they're (you're) testing in Step C, I drew up a few quick schematics. I left out the shunting circuitry to simplify it (plus I'm not sure of the method that our reg/rect uses), but the rectifier portion should be very similar to this.
The "little triangles" represent diodes. You can think of diodes as an electrical equivalent to a check valve. It allows current to flow in one direction but not the other. It takes a certain amount of "pressure" (voltage) to open the check valve. This "pressure" is typically 0.5 to 0.7V, but it depends on the diode. The side with the line on the symbol is the "blocking side of the diode".
In the first test, they want to see if the check valve (diode) is properly preventing flow (current) from traveling backwards through the valve. They decided to check the positive terminal of the rectifier first. Current flows from the Red Lead to the Black Lead on the multimeter assuming the leads are hooked up correctly. In this scenario, the diode should block this current flow and cause a high or OL reading on the meter.
If you follow the current path in the picture below (current must flow through the lines and complete a circuit), you can see how the first test is testing the diode in reverse (preventing current flow). The fuzzy grey arrow represents the direction of current flow (or "attempted" current flow).
This is repeated for all three legs (yellow wires)... here is the next leg:
The same thing is done for the third leg though I won't post it out of redundancy.
The next check is to determine whether the check valve is "opening" properly. Current should flow from the Red lead, through the diode and into the black lead. A properly functioning diode should require about 0.5 to 0.7V to open the pathway.
Again, this is repeated for the other two yellow wires.
If everything checked out on the diodes leading to the positive terminal on the DC side, Electrex next has you check the Negative terminal on the DC side. Notice on the negative side, the diodes are facing the opposite direction in relation to the path of flow.
Putting the red lead on the negative terminal (black/wht wire) will test if the diode is "opening" properly, while putting the read lead on one of the yellow wires will test if the diode is "blocking" properly.
Sorry about all this technical boring stuff, but I hope it helps someone understand at least a portion of their charging system better.
I'm going to bed now before I injure my brain...