What Cowboyup noticed was some "iffy" wiring. Please disconnect ALL the hwiring at the back of the bike, it's not really all that much. There should be the 3-pin connector to the tail light, a gray wire that feeds the license light and four bullet connectors to the turn signals. Please make sure they are ALL disconnected so there is NO electrical path from the front of the bike to those lights.
Repeat the two wires into the 3-pin connector test. If your license light changes brightness, there is something wrong in that assembly, unless there is some "customized" wiring between the white connector and the bulbs.
If you go to BassCliff's site, (bookmark it, you will be using it a LOT) you can get a very nice copy of a color wiring diagram for an 850. It's not quite the right one for your bike, but it has the easiest-to-follow colored wires. The difference between that '80 diagram and your '79 bike are the igntion (points vs electronic) and the turn signal controller (different style, different wires feeding the controller). Other than those items, that is a very good diagram to follow. Click HERE to get the diagram for your '79.
I have a sneaking suspicion that there are some wires crossed in there, it will be easiest to just pull them all and start from scratch.
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