I have never seen a timing issue on a generator, you can't electriclly dump load on them quick enough to shear a key. If the flywheel has come loose, it may shear a key. Don't laugh, but i think it is the plug. ( if i had to guess) .. You may see spark now, but as pressure increases in the engine the resistance of the air fuel mix becomes greater,the plug may be fouledto a point that the resistance throught carbon on the insulator is less than the resistance throught gap. Thus not firing under compression load.. When we check aircraft spark plugs and clean them, they are we tested in a controlled pressure /windowed box for such a reason. Try swaping out the plug and let us know. Good luck, Friiy
In all of my years and experience with numerous small engines, I've only had two spark plugs fail. Both sparked outside the cylinder but would not fire when installed. A new plug was the fix. If the OP is putting fuel directly into the cylinder via the spark plug hole, the engine should fire if there's spark. If it fires and runs for a bit, the electrics are good. If it doesn't fire, something is amiss in the ignition system. I'd start with a new plug, then check the plug socket/lead and work backward into the coil/points/cdi, etc. The low oil switch has confounded many a novice. If the engine has one, ensure the oil level is up. If oil level is good, disconnect the switch and try to fire the engine.
