I am not sure if you are the one who asked before or not. You have knob and tube wiring which is the original wiring that they used to wire homes in the late 1800's and early 1900's as well. This wiring does not short out like the wires do today because it is separated by the knobs they used one is hot and one is neutral. They do break and cause trouble and they do not short out to one another because they are separated. The do come together at the openings at the lights and as they go down to switches etc. but normally they were separated even the but as people climb in and out of attics and move and pull them they do get moved. Do not move them any more then you have to and do not pull them or try to move them. This wiring when done right is safe as long as it is still insulated but if you have the budget then hire an electrical contractor to replace it for you with new romex wiring. If you do not then just avoid moving it at all cost and try to avoid hitting it etc... Make sure this wire has the proper size fuse or breaker and do not use any thing larger then a 15 amp breaker or fuse on these circuits and if you have trouble blowing fuses or breakers then you need an electrician to help you split some circuits and run new ones.
You need to replace the wiring. Be care-full, if the old wiring has insulation on it, it most likely is asbestos.
Check to see if these wires are still live, if the electric has been updated that does not mean the old wiring had been removed. If you are unsure call electrician, old knob and tube wiring can be dangerous.
That must be some OLD wiring. All you can do is be very careful. This would be a good time to consider putting in new wiring.
This is one time I'd say life was much more important than the savings of heat and cooling. Your wiring is too old, probably brittle for any kind of activity up there. Just get some new wire and install it before messing with the insulation. Then if you have enough left over install what insulation you can.
