Check the internal resistance of the cable with an ohmeter. Such a large cable should have next to no resistance. (< 1-2 ohms)
I can gaurantee you this. If you had a bad circuit like an a/c blower or headlights, the wires that feed those circuits would melt LONG before the main battery cable would. You'd see fire everywhere before you'll see that battery cable melt.
I would simply replace the battery cable and be done with it. I've seen one that was horrible. It was swollen halfway down the cable and although the battery had 14 volts when it was running, there was only 8 volts at the starter, despite there only being about 2 feet of cable between them.
Good luck,
Mark