HJ60 1986 diesal wagon cuts out when headlights switched on.

Fairly common issue, had same thing on a 1974 Celica, most of the power went trough one plug, over time the connectors loose their tension and start to arc. Result as per yours, a charred connector and no power.

Most modern vehicles have connectors which are sealed fairly well and so the corrosion which causes loss of pin grip and resistance is far less.

The HJ60 diesel would be losing sense voltage to the alt reg and that makes the lights flash.
The oil pressure time out would become low on voltage and turn off the engine, similar to having no oil pressure after startup, ie for 20 secs or so and if no oil pressure detection the timer will shut off the engine. Normally happens if oil pressure doesn't arrive.

I had a HJ61 for 25 years and periodically removed and cleaned likely connectors to prevent similar things happening to the wiring. Maintenance no one ever seems to do.
Even removal and spraying good connectors with a contact cleaner and lanolin on refitting will lengthen the connectorslife span AND keep water and corrosion away.
Most Toyota connectors are smothered with lithium grease on assembly. Pressure washing often destroys the grease and brass worm takes over if left untreated.