When the engine loses the proper ground it finds the path of least resistance, hence, the steel braided oil cooler lines double as a "crude" ground typically arcing & zapping a hole at the place the braided line contacts the frame. If you had the bad line present in your hand you can see where it looks like it burned a hole about midway in the line.
Another consideration Steve ... Your vehicle may be properly grounded now. However, can you think of anytime when you may have had a cranking issue or a battery disconnected and you tried to turn the engine over? That will indeed cause the same occurrence.
Hope this helps,
Doug
A little follow up on this potentially dangerous situation. I had all the ground connections cleaned and reconnected. They were visually all OK upon initial inspection. The mechanic also did a before and after voltage potential test while cranking the engine. This test basically checks the current path from the engine to the chassis by measuring any difference in voltage potential while cranking the engine. Anything over .4 or .5 volts could possibly indicate that the electricity could/would take a path of lesser resistance if it was available....as in brake lines/oil cooler lines etc. He came up with a static reading of .110V and a spike reading of .160V. The starter draw was 120 amps static and 155 amps peak. There was 0 volts from the battery post to the chassis. After redoing all the connections, he did the same test and the static voltage dropped to .85volts/spike .12Volts. According to the mechanic, even the initial results were within spec for these tests. This leaves my oil line failure still a little mystery although Doug's second thought above may have occurred a few thousand miles ago when the computer locked up and I couldn't get in the car from the outside. Resetting the fob did nothing. I did open the car from the inside and tried to start it....nothing. The security overide also produced no results.
Disconnecting the battery for a few minutes put me back in business. This alternate ground path may have somehow happened then, producing a weak spot which later manifested itself into a hole.
Sinc Doug posted this about the alternate ground path, I have heard of a truck which started on fire when a brake line became the ground path due to corroded connections in the normal ground path.
Thanks again to Doug for his excellent information on this subject. I am much more at ease having had the above work done and voltage potentials checked.
Steve