Cat specced a pair of group 31 batteries for these engines, you really don't need any more unless you have electric loads to feed when the engine is not running. A single pair of the original 6t batts will be more than fine…
the LBCD senses generator overload and disconnects the batteries. I have never seen anything like this used anywhere else ever. I believe They did this because they put in too large a battery bank originally, and they did it to save the alt from cronically discharged batts.
when you disconnect a alternator at full load(full field drive) from its load(batts) it takes time for the reg to remove the field drive, and even more time for the magnetic field to collapse. This causes the voltage to spike out of control. They put a large bank of capacitors in the LBCD to absorb this energy. If those caps have failed the large volt spike probably was felt throughout the electrical system before the field collaepsed. This would drive the alt into overvolt cutoff/red leds.
Drop to two batts, the alt should never be overloaded then. Unplug the cannon plug from the LBCD so it cannot remotely disconnect the batteries ever again. This turns it into a simple polarity protection device. Then as Superman said, you need to confirm 12 and 24 are reaching the ignition relays K1 and K2 under the power panel. A large unabsorbed alternator spike could have damaged the diodes in the polarity protection device portion of the LBCD.
converting to 12v is not very practical on these vehicles. The earlier transmissions could accept 12 or 24v power, but they went to 24v only on the later versions. Feeding one 12v only may have damaged its controller… Converting to a common off the shelf 24v alt and providing the 12v power for lights with a power converter IS VERY PRACTICAL and relatively easy… it is also less expensive than replacing a dual volt alternator…