Peugeot 205GT Alternator/Battery

Hello and thank you!
I have a 1988 Puegot 205GT. It has a bit more than 184,000 kilometers on it but is in excellent shape; at least it was. Since it is old, it is a simple machine. No computers, fuel injection or any of that. Basic mechanics and electronics. So I believe my question should be a very simple one.

Recently I noticed a strange smell coming from under the hood. When I looked, what I found was smoke coming from the battery. Upon futher inspection I found that the cap had somehow come loose from the battery (very strange since it is a no maintance type) and that it had almost no water left in it. So I added distilled water, jumped the car to get it going and started into town to have it checked. As I was driving I noticed that the tachometer was not regestering RPM's nor were the gas or temperture gauges functioning. Then she sputtered out and died.

Believing, rationally I thought, that I simply needed a new battery, I put one in only to discover that nothing functioned; no lights, no radio, no wipers. Nothing. The fuses were all intact and all the connections I checked were fine; clean and tight.

So my question is; if the alternater is faulty would that affect the entire circuitry of the vehicle; cutting the current to evey electrical device even if the battery is new?