what you are describing is not a short (insulation cut away on a wire touching the frame) - that would blow a fuse
it sounds like one of your connectors is corroded, or as other have said a ground wire has a bad connection to the frame.
start with the battery black wire to the frame, trace it down and see where it goes, and disconnect it from the frame and clean it up.
Next I would look at the ECM, because it controls the ignition and the speedo - trace its ground wire to the frame. The ground wires are usually black.
If you dont have the schematic for your bike already its easy to find the factory service manual online as a free download - the schematics are near the back of the manual.
If the bike was just shutting the engine off I would suspect the kickstand switch (engine will not run with the kickstand down in gear), but since you are losing other electrical functions it sounds like a main ground wire.