Okay, good information. Do you have a small subpanel in the shed with no main wires coming from the house to feed it?
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Okay. Thanks for your patience with my questions. The information you have given me is very helpful. What I would recommend in your case is to connect the cord that will plug into the generator to the mains in the shed panel. I would also recommend driving 2 ground rods outside the shed and connecting a grounding electrode conductor to the 2 rods and the ground/neutral bar in the shed panel. I would replace any standard outlets in the shed with GFI outlets. Since the generator will be considered a service and not a subpanel, you will connect ground wires and neutral wires to the same bar, instead of seperate bars like you would if the shed panel was fed by the main panel in the house. If any of this is unclear, please let me know. Also, if you need a diagram showing how to connect the system, let me know and I would be happy to post one for you.
Hope this helps you out. If you should need anything further please don't hesitate to ask. Have a great night!
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The reason the ground and neutral will connect to the same bar is because the generator is considered a service (or main panel) and the shed panel is your access to the branch circuits of that service. If the shed panel were fed from the house, it would be considered a subpanel, not a service. The grounding/bonding requirements for subpanels are different than they are for main panels. I am working on your diagram now, and I will get it posted as soon as it's done.