Jerry, the #2 candidate in the photo is what I am leaning toward as well - I took another look through the diesel engine manual and also got some information from a New Zealand forum.

The other part, which you feel may be a vent valve, I believe may be a sensor. Since the terminal is grounded, it can't be any sort of actuator (unless it is broken and shorted to ground). I am thinking it's more like the oil pressure switch on the engine and makes/breaks a ground path depending on conditions. I am not sure what it might be a sensor for - loss of fuel pressure?

At any rate, I am still puzzled by the fact that the suspected cut solenoid has continuity with ground. Unless I am testing the wrong wire or making some other silly mistake, applying power to it will result in another short. I am going to remove the boot and test the terminal directly next, which should be interesting since it's hard to get at.

Thanks for the insight.

More later...