LeftieBiker said:
It's a cheap Home depot Special. GP7500DEB, 6,200-Watt Propane (LPG) or Gas Powered Generator.
OK, there is a mismatch between the type of transfer equipment you have and the type of generator you have.
Recall that the EGC is really a bonding conductor and its connection to earth is of limited importance. And the EGC needs to be bonded to a circuit conductor (the neutral for a voltage system that has a neutral, like the US residential 120V/240V system) so that when a hot conductor shorts to the EGC, enough current flows to trip the circuit breaker. This bond needs to be located at only one place in the electrical system; if it occurs in two or more places, then the EGC is parallel with the neutral, and current will flow on the EGC during normal operating conditions. Having current flow on the normally non-current carrying metallic parts of the electrical system is a safety hazard.
Your main panel has the neutral-EGC bond for usual grid supplied electrical operation. Your transfer equipment is a mechanical interlock between two breakers, the main breaker (for energy from the grid) and a breaker for a feeder from the a generator. This means only the hot conductors are switched, not the neutral.
A stand-alone generator with receptacles on it provides hot(s), neutral, and EGC via the receptacles. In order for the receptacle EGC to function, such a generator must have a neutral-EGC bond within it. You can verify this with the generator off by simply measuring the resistance with an ohmmeter between the neutral and EGC pins on a receptacle.
Now when you hook your generator up to your inlet using your transfer equipment, you have a system with two neutral-EGC bonds in it. While running on generator, some of the neutral return current will flow through the EGC, which is a safety hazard. In order to use a generator with your type of transfer equipment, you need a generator in which you can remove the neutral-EGC bond (and I didn't see any discussion of being able to do that in the manual for your model.) You'd need to restore the bond whenever running the generator stand-alone.
The proper solution to using a generator with a neutral-EGC bond to supply a house is to use transfer equipment that will switch the neutral. That will isolate the main panel's neutral-EGC bond from the electrical system when running on generator. You can read more about that in the UL category description page for "Engine Generators for Portable Use, FTCN" here:
http://productspec.ul.com/document.php?id=FTCN.GuideInfo
Cheers, Wayne