Hello ccjersey
First thing this morning I checked the compression before trying to fire up the pony engine. Compression was about 85 psi on both cylinders, not too bad according to what I have been reading on the forum. Then I checked the spark, which appeared to be adequate, both cylinders had a decent spark when held about 1/4" from the base of the new Autolite 386 plugs. I then tried to start the pony and it fired up right away. I ran it for couple minutes and shut it off and fired it up again. It fired up right away. I repeated this proceedure for 7 times, but never tried to crank the main engine. After the 7th crank, I attempted to crank it again, but it would not hit a lick. This told me that the main engine was not related to the problem. I checked the compression and it was 75 psi on both cylinders, again not too bad. Then I checked the spark on both clyinders and they were minimal at best. I thought there must be a problem with the magneto so I removed the magneto cover and took a look inside. I saw moisture all over the brushes, and thought I had found the problem. After drying the moisture and replacing the cover, I attempted to fire it up, but it wouldn't fire. I checked the spark which was very erratic on both cylinders. Sometimes I would get a spark on one side and not on the other and then the other way around. Whats going on, I thought!!! Must be something else in the magneto. Decided to completely remove the magneto, which was no easy job. Seems that after many years of being exposed to the weather, the magneto had become very comfortable in its position and didn't want to be moved. But after much prying, wedging, pecking and praying, in addition to several squirts of WD 40, it gave up its position and I got it off. Put it in my vice and took off the cover. At first I didn't see anything, but closer inspection revealed that the terminal end of the wire attached to the points was very close if not touching the nut on the end of the rotor shaft. Could it be this was the culprit? I cleaned up everything and assembled it back on the pony, checked the spark and wow what a difference in spark. It was making a bright spark well over 1/4". Hit the starter button and away she went. After many cycles of starting and stopping, both the pony and main engine are still cranking and running OK.
Just want to thank all of you for your much needed help in solving this problem. It's good to know that there are people out there who are willing and able to help.
My next project is to convert the generator to a 12 volt alternator. A local starter shop says he knows someone who can convert it for $500. Seem a little pricey, but I don't know. Any suggestions?