The flasher's have never worked on this bike for a long time. They do light up along with the indicator on the speedo, just never flash. So I'm guessing the flasher is bad. But now that I see this black wire broken and not connected to anything, could this be the problem? One end is attached to the frame and were does the other end connect to? any ideas? See photo's.

The original flasher has 3 wires plugged into it and one is ground.  So look where the wires hook to flasher.  Can't see wire connection to flasher in your pictures.

If you change flasher BUY A 2 WIRE.  Modern flashers don't have ground wires anymore and if you buy a 3 wire you'll have a direct short. 

Of course if you buy a NOS Yamaha flasher for big $$$ then just get the original. 

It did have a 3 wire original, black wire plug into ground. I replaced the 3 wire flasher with a 2 wire and grounded the outside of the flasher to that black wire and it works great now.

Great job!   

(The new flashers don't normally need to be grounded but it probably can't hurt.)