Without being able to see the cables as they enter the cabinet; or the ability to touch or trace them, here is what I assume is going on.
Definitions:
Grounded (neutral) from the service
A typical single split phase service is made up of 3 wires. Two ungrounded (hot) conductors, and one grounded (neutral) conductor. The ungrounded (hot) conductors will connect to the main service panel through a disconnect (usually a large breaker), while the grounded (neutral) connects to the neutral lug. The neutral lug will be bonded (electrically connected) to the neutral bus bar, and all grounded (neutral) branch circuit conductors will terminate at the neutral bus.
Grounding Electrode Conductor
This conductor is used to connect the grounding electrode (ground rod, etc.), to the grounding bus in the panel. All equipment grounding conductors will be connected to this bus.
Bonding Jumper
The bonding jumper is used to bond (electrically connect), the un-energized metal parts of the panel to the grounding system.
Assumption:
Since it appears that (what I assume is) the grounding electrode conductor terminates at the neutral bus, I'm also assuming that this is the main service disconnect. This leads me to believe that the neutral and grounding buses are bonded (electrically connected). In which case, technically, grounded (neutral) branch circuit conductors can terminate at the grounding bus.
So you have two options:
Terminate the grounded (neutral) from the new circuit to the grounding bus.
Move the green wire that is terminated on the neutral bus, to the grounding bus. Then terminate the grounded (neutral) from the new circuit, to the freed up slot on the neutral bus.
Additional Information and Code Compliance:
Number of Conductors
Since this is a new circuit, it has to be installed to current code standards.
National Electrical Code 2011
ARTICLE 250 — GROUNDING AND BONDING
VI. Equipment Grounding and Equipment Grounding Conductors
250.140 Frames of Ranges and Clothes Dryers. Frames of electric ranges, wall-mounted ovens, counter-mounted cooking units, clothes dryers, and outlet or junction boxes that are part of the circuit for these appliances shall be connected to the equipment grounding conductor in the manner specified by 250.134 or 250.138.
Which in this case means installing a NEMA 14 receptacle for the dryer, and a proper grounding conductor.
You'll have to follow the dryer manufacturers installation instructions for upgrading to a 4 wire cord. For more information see this answer, and this answer.
Since you've said that you're already using 4 wire cable, you'll simply have to terminate the grounding conductor in the cable to the grounding bus in the service panel. Then connect the other end of the grounding conductor to the grounding terminal in the dryer receptacle.
Size of Conductors
You'll also want to be sure that you're using the proper size breaker and conductors. In the case of a dryer, you'll typically use a 30 ampere breaker and 10 AWG conductors (depending on the length of the run). However, you'll want to check the dryer manufacturers installation instructions to verify this.
The breaker is primarily in place to protect the wiring. So first thing you should evaluate is the size (gauge) of wiring on this circuit. For a summary of normal copper wire usage:
- Breaker 50A Wire Size 6 AWG
- Breaker 40A Wire Size 8 AWG
- Breaker 30A Wire Size 10 AWG
- Breaker 20A Wire Size 12 AWG
It is also recommended practice on dedicated circuits like this (circuit breaker via single branch wire run to single outlet) that the outlet be also sized to the wire and breaker.
Now with that said there is no real problem with changing your outlet to a 30A style and changing the breaker to a 30A two pole breaker as long as the wire is 10AWG or larger size. There would be a strong recommendation that you make sure to use a 4-prong type 30A outlet, as opposed to the 3-prong type, so that you get the safety ground connection all the way to the appliance.
Best Answer
I would say the main suspect is your breaker.
If it was heating up and not tripping it is probably faulty.
The normal breaker for a dryer circuit is 30 amp and #10 wire.
To use a 60 amp breaker for a dryer circuit you would need a minimum of #6 wire (smaller numbered wire is larger). I would suspect your wire is not that big.
If a voltage test at the outlet does not show voltage then you should try replacing the breaker with a 30 amp for a fairly inexpensive fix. If that doesn't work. It's possible the dryer needs repair.
Good luck and stay safe!