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I did ground the orange wire to the green. The diode is attached to the LB wire.

View attachment 216524 View attachment 216524

I used this kit : Kuryakyn 4709 Motorcycle LED Lighting Component: Diode Kit Wire Assembly for Metric Motorcycles with Single Turn Signal/Blinker Indicator Light on Dash

and the instructions from Bad Ass Choppers:
Read this part carefully…
With the orange and light blue wires cut, strip the insulation from the orange wire coming FROM the dash lights and splice it into the green wire in the harness. This green wire is your bike’s ground and you want to tap this wire into that ground. Once you solder the orange wire into the green, heat shrink the connection or wrap it tightly with electrical tape.
Now you have 3 wires left, 2 coming from the bike (orange and light blue) and the light blue wire coming from the dash lights. You have to decide whether you are using the Kuryakyn premade diode kit or if you are making your own kit.
I used the same diode kit in 2004 and followed the same directions of Bareasschoppers and everything is still ok. So check if you didn't do anything wrong. Is your back light oem or also LED?
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