Hopefully you noticed
1) The discoloration of the bottom of the fuse on the right, the printed portion has discolored to a brown 'burnt' color.
2) the metal portion has discolored, compare it to the one on the left.
3) the corrosion of the wire terminal.
4) the insulation on the aluminum wire is also discolored from overheating.5) no the cable that was cut and the end facing you isn't a problem. apparently it was abandoned some time in the past, cut off and left, but not currently a problem.
Folks this is a fire waiting to happen. It may have taken a couple more years to actually be a problem, but fortunately it was discovered in July 2011 otherwise how much longer would it have continued to deteriorate? What we observed when I was on site to advise about installing some new out door lighting, is that this main service (200 amp) was modified. A wire was added to add a circuit for some outdoor lighting. Unfortunately they installed the single #12 gauge wire under the lug where the #250KCM wire was terminated. This is not a code compliant method for making that connection and now you know why. The #12 gauge wire as small or smaller than the strands of wire that make up the #250KCM wire worked it's way loose and started heating up likely due to arcing because the connection was loose. It finally burnt through the wire as the client mentioned that 'just the other day' the motion sensor stopped working.
Put it in the Bank take home lessons:
If something stops working and you can't figure it out (she checked the lights in the motion sensor, but wasn't able to evaluate the condition of the sensor) GET IT LOOKED AT!!!! often the problem is the symptom of the problem and you haven't yet found the cause.
