I completely rebuilt the existing 1.3L 13ga.  New pistons, rings, seals, valves, gaskets the basic rebuild items.  Set timing, new belts, everything seemed great.

When trying to start there is no motor rotation.  The starter clicks and does not rotate.  The wires (12v hot) connected to the started get hot.  Hot to the point that they are uncomfortable to touch.  The engine did turn over acouple of times on one try then never again.  I replaced the starter and still no go, wires still get hot.  I can put a wrench on the crank bolt and the engine turns freely so it is not locked up.  Replaced the battery, was due anyway, and no change except wires get hot faster.  Any thoughts?

It sounds like you either don't have something wired correctly or something is not connected at all.  If it is clicking that should be the solenoid kicking in, the next step would be the starting firing up.

Double check the wiring going to the starter. 

if you ran it at all you might of put the head gasket in wrong and sized the camshaft.

I completely rebuilt the existing 1.3L 13ga.  New pistons, rings, seals, valves, gaskets the basic rebuild items.  Set timing, new belts, everything seemed great.

When trying to start there is no motor rotation.  The starter clicks and does not rotate.  The wires (12v hot) connected to the started get hot.  Hot to the point that they are uncomfortable to touch.  The engine did turn over acouple of times on one try then never again.  I replaced the starter and still no go, wires still get hot.  I can put a wrench on the crank bolt and the engine turns freely so it is not locked up.  Replaced the battery, was due anyway, and no change except wires get hot faster.  Any thoughts?

There should be one large gauge wire coming directly from the positive post of the battery, going to the starter solenoid connection and held on with one of the big nuts on the end of the starter solenoid.
There should be one small gauge wire coming out of the wiring harness that connects to the spade terminal on the bottom side of the starter.
There should be one large gauge wire coming from the negative post of the battery that is connected to the starter by one of the bolts that hold the starter to the tranny.

If you have all of those hooked up and hooked up right, then the problem could be that the key switch isn't flowing enough electricity to activate the solenoid (common problem on samurais....called a "clicky starter").  Do you hear a click or anything from the starter, when you turn the key to "start"?
If that ends up being your problem, then a "clicky starter" fix is all you need (it consists of a 30amp relay and wires that are connected to the battery, a ground, the starter and the original starter solenoid wire is hooked to the relay to activate it).

The wires are on the starter correctly.  What would be making the starter hot wire get very hot?  Is it possible that the bendix is jaming against the flywheel and not enguaging there by not making the motor rotate?  I can turn the crank with a wrench and the cam turns as well.  It never started after the rebuild but it did turn over once or twice.  Is there a clutch position sensor that will keep it from turning over?  I did not really adjust the clutch but just set it to where it will allow the car to roll while depressed and in gear.

Which wire are you talking about getting hot?  The one from the positive battery post, the negative battery post, or the smaller one that goes to the starter solenoid?
Wires generally get hot from either being shorted out or from there being too much electricity/amps flowing through them.
There is a clutch switch at the clutch pedal, that won't allow it to start (what it does is actually not allow voltage to reach the starter solenoid) without the clutch being pushed in, therefore pushing the clutch switch in.  But since one of the wires at the starter is getting really hot, you are getting voltage to the starter, so I'd say the clutch switch isn't the issue.
I guess you could pull the starter off and bench test it.  Negative wire to starter case, positive wire to starter motor post...it should spin up.

I guess you did say earlier that the starter will click (well, it is probably actually the starter solenoid you are hearing click).  So you are getting voltage to the starter, but probably not enough voltage to actually operate the solenoid.  You replaced the starter, so you know it isn't a starter issue.  The only thing left is a clicky starter issue...which has already been covered.

Ok, finally had a chance to work on the problem.

Both the hot and the ground cables from the battery get hot.  The dieletric grease on the battery post is smoking when you turn the key! 
I can hear the starter click to enguage and I can hear the bendix extend.  It sounds like the bendix is binding on the flywheel.

Is it possible to put the flywheel in backwards thereby not allowing the starter to enguage it properly?

Went ahead and pulled the starter and had it bench tested.  Tested good but will replace it anyway while under warranty.

I will also check and cross reference the part number to make sure it is the correct starter.

Has anyone ever had to shim or put spacers on the starter to get proper distance to flywheel?

If you put the flywheel on backwards, you wouldn't have been able to bolt your clutch on.
I don't think it is a wrong starter issue either.
Sounds like the wiring may be hooked up wrong somewhere.
I have never heard of anyone having to shim or spacer a samurai or trackick starter to get it to work right. 
I have heard of people bolting the starter on loosely, then prying it away from the flywheel, then tightening the bolts.  But that is generally when they are mixing trackick starters with samurai flywheels.  But you could try that, if you think the starter is binding on the flywheel.  It's worth a shot, at this point.

Let me make sure that I wired the starter correctly.

The post with the lead comming from the starter motor to the solenoid is the Negative/ground correct?

The other single post is the hot correct?

The spade connector is for the switch/key correct?

Let me make sure that I wired the starter correctly.

The post with the lead comming from the starter motor to the solenoid is the Negative/ground correct?

The other single post is the hot correct?

The spade connector is for the switch/key correct?

I already explained it before, how it should be wired.

There should be one large gauge wire coming directly from the positive post of the battery, going to the starter solenoid connection and held on with one of the big nuts on the end of the starter solenoid.
There should be one small gauge wire coming out of the wiring harness that connects to the spade terminal on the bottom side of the starter.
There should be one large gauge wire coming from the negative post of the battery that is connected to the starter by one of the bolts that hold the starter to the tranny.

So there should be only one large gauge wire(hot) connected directly to the solenoid, correct?  I must have missed that earlier.  Sorry to be so dense.  Which bolt do you use for the ground the upper or the lower?

So there should be only one large gauge wire(hot) connected directly to the solenoid, correct?  I must have missed that earlier.  Sorry to be so dense.  Which bolt do you use for the ground the upper or the lower?

Yes, only the large wire from the positive battery terminal goes to the solenoid lug (attach it to the lug closest to the battery).  If you had both the positive and negative wires connected to each lug of the solenoid, what you were doing was effectively shorting the two wires together, when you turned the key to the start position and that is why the wires were getting red hot.
You can use either starter bolt for the negative wire.  I use the one that takes the nut.

Christ! I can be rether dense at times!  Sorry to be a pain in the ass.  I will go sit in the corner now.

Christ! I can be rether dense at times!  Sorry to be a pain in the ass.  I will go sit in the corner now.

So did you get it going?

Waiting for the rain to stop and to get off work.  I will let you know.  Thanks again!