Battery melt

Matt, has it right, the split lock washer made a bad connection. I've seen terminals melt on electric lift equipment from loose or bad connections a few times. Your cable end needs to be down on the terminal then a flat washer between the cable and the nut. No need to use a lock washer. Just check the tightness of your connections every now and then as part of your maintenance routine.
If you can get a good flat on the terminal for the cable to lay on, the battery will still work fine.