The key here is that the 14VAC is at rated speed - not cranking speed.
At cranking speed, the voltage will be much less.
My guy at Generac said it should read at least 1 to 1-1/2V. If you are only getting 0.4, my guess is that the mag is to weak to produce enough current to operate the relay on the board.
I honestly can't say for sure whether it is good or bad, but it sounds bad to me.
One thing you might try. See if you can adjust your mag in just a little to increase the voltage.
Just be careful that you do not get it in so far that it hits the flywheel.
The 12V should not be there when the switch is 'Off'. Shutting the switch off turns off the board.
If this were my set, and adjusting the mag does not help - or can not be done if it is already too close to the flywheel - I would first replace the mag and see what happens.
This magnetic pickup is a Hall-Effect switch. A lot of marine engines use them, and they are really bad about going out.
I'm really sorry there is not a more comprehensive test for it.
And the guy at Generac also told me there is no service manual for this set, so I am also at their mercy and recommendations in regards XXXXX XXXXX things.
Let me know if you can adjust the mag, and what you wish to do next.
Edited by Hank F. on 10/5/2010 at 4:15 AM EST