Ken,
Me, too!

See Reply #17 here:
http://forums.catalina.sailboatowners.com/showthread.php?p=846963Uhm, "tomorrow" never came from that post. It does, however, remain valid for me, and I am assembling the parts to do the correction.
We have an external Balmar MC-612 regulator for our Blue Circle 100A alternator.
My goal, as stated in that link, is to remove the battery sense wire from the alternator and wire it from the regulator to the house bank. Please note, however, that the instructions say you can leave it on the AO. By doing that, I kinda "induced" that 1.2V drop, because the battery sense wire wasn't on the house bank but only on the back of the alternator.
Shoot, I must admit I DID read the instructions!!!

So much for doing THAT anymore...
After repacking my stuffing box and putting in a new bilge pump switch today (F*ck Rule for changing both the height and spacing of the screws to hold the damn thing down!!!), I looked at my records, sketches and wiring diagrams, and know that I have a couple of well labeled and identified abandoned wires that I may be able to use to connect the regulator battery sense post to the house bank and get it off the alternator output (AO). A month or so ago my son and I attempted to run that new wire I mentioned in that linked post, but the pull cord I cleverly installed a few years ago, underneath the engine from the stuffing box to the area under the galley sink by the hot water heater, was hung up on something and didn't allow us to do it then.
That's why they invented "tomorrow."
So, Ken, then consensus is: sense the house bank. Regardless of whether you have external or internal regulation for your alternator.
Thanks so much for pointing this out.
*********************************************
For those of you who "don't do links" (imagine that!), here's what I said:
This is a perfect example of real world issues. Like, take me, for instance!!!
I took the "shortcut" route of having the battery sense wire connected to the AO when I installed our MC-612. As you know, we also have a Link 2000. By habit, I would check the voltage at the regulator, and the amperage at the Link. Always looked fine to me.
Last week, after two grueling days of motoring, I happened to check the voltage at the Link 2000, and GUESS WHAT?!?. I was losing almost that same 1.2 V that Maine Sail described.
Just yesterday (really, honestly ) I bought a length of wire to finally install the battery sense wire to the bloody batteries, just like the instruction manual tells you to do.
I spent a week checking connections and confirming the integrity of my AO wiring, grounds, the shunt - you name it.
I finally came to this same conclusion, and all because: first I'd been lazy in the installation, and second, because while I have great instrumentation, I'd only been using the AO voltage display at the regulator and the amperage at the Link, not reading the voltage at the Link 2000 while the alternator was working - until last week when I thought "Houston, we have a problem!"
The battery sense wire goes in tomorrow.
Too bad there's not a "humble pie" emoticon!!! YIKES!!!