A bit of explanation of the diags output.
The first thing the initialization code does is look for proper power status
of the glcd.
It looks at status bits that indicate that reset is complete and that the glcd
is not busy and is ready for initialization.
The error "RESET wait Timeout" means that after waiting more than
should be necessary the board "appears" to be stuck in reset.
I say "appears" because this is based on a status bit and if the wiring
is not correct, than the status information is not really valid.
Usually this type of error is from improper wiring.
I'm not sure how you have things wired but components should not heat up
(or at least not very much)
That is sure sign of something miswired and is definitely not a good thing.
Guessing on wiring is not good as miswiring can damage the glcd or arduino.
So if things are not clear it is best to ask before turning on the power.
Pay very close attention to the power connections and how the contrast
pot is wired. (The contrast pot wiring for a ks0108 is not the same as a hd44780)
As far as the other diag information, you can see that it prints the pin configuration.
It shows both the AVR pin # and the raw AVR port/bit value as well.
You can use this information wire up the glcd rather than the table if you like.
Each signal indicates the arduino pin that must be used for that signal.
So for example:
CSEL1:33(PIN_C4) CSEL2:34(PIN_C3)
Means that CSEL1 is on arduino pin 33
and CSEL2 is on arduino pin 34.
If you look at your datasheet then
CS1 is on glcd pin 15, so Arduino pin 33 would be connected to glcd pin 15.
This matches what is in the table for glcd "B" when using a mega:
If you look in the table at the "GLCD Function" column and scan down
to CSEL1 then look left to the number in the "Mega" column you will see a 33
and if you look right to the "Panel B" column you will see a 15
So that indicates that Arduino pin 33 is connected to glcd pin 15.
One other thing I've seen that has caused issues is mis identifying the pins on the mega.
Don't forget about the power pins along the top when you count down the Mega pin numbers
on the connector.
--- bill