If you have access to a PS2 brake controller.... it has a display code for shorted (SH) wire connections...even if the trailer isn't connected. Without that in the display, I'd know I was chasing a broken yellow wire. With it, I'd look for a crush spot on the harness. Either way, you're investing time in piercing wires with the multi-meter to find the culprit.
Here are detailed instructions from the manufacturer:The first error code, SH, you are seeing on the Prodigy Brake Controller, means the brake wire sees a short circuit during idle condition. The second code, OL, indicates an overload condition during operation.
For the first code, SH, the most likely problem is a pinched wire or at some point the wire insulation has cracked or been worn to the point where the copper wire inside is making contact with the trailer frame or another metal part. To find the problem, you will need to start at the trailer connector, making sure it is not corroded, dirty, or damaged, then work your way back to the brake magnets, examining the wire as you go. The fix is to replace the damaged wire and/or clean off the connector.
The second code, OL, could be related to the first. A short between the brake output pin and the ground pin on the 7-Way could cause an overload. Cleaning the connector of any dirt or corrosion would be the first thing to try. If you still have the same problem, sever the connection of the blue wire at the back of the brake controller. Leave enough wire to reconnect the wire after testing.
Once the blue wire is severed, if the brake controller returns to normal function and the decimal point returns on the display, you know that the problem is on the blue wire somewhere between the controller and the connector at the rear of the vehicle. You may need to run a separate 10 gauge wire, # 10-1-1, to the trailer connector to bypass the problem, unless you can locate, isolate, and repair the bad spot in the wire.