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My question is this would not the two 100 amp disconnects allow the service entrance conductors to draw a theoretical 200 amp load if each disconnect was drawing a full load.
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Yes you are correct . Looks like white wire used on a 240 volt circuit has overheated , Usual reason loose connection . It should have been made black ,many years ago not usually done .
Could the incoming wires be undersize they look small ??? was there a main disconnect and what size was it
Incoming conductors I believe were for 100 amp service. That is the issue there are two disconnects each on with a 100 amp fuse set up. To my way of thinking that could overload the service conductors . I did write it up along with many other electrical issues in the home for a full ESA inspection and a review by a licensed electrical contractor for repairs to system.contractor. A lot of handy man installation goin on in the place.