Small Engine Troubleshooting Problems? Ask a Mechanic Now.
More than likely this is a defective stator/windings. This is probably the most expensive part on the generator. Depending on what you paid for it, it may be just as good to purchase a new one.
Be sure first that the reset on the receptacles is not tripped. Then you may want to try a new receptacle. If that is ok, then it is more than likely the stator windings.