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@ GreggM: I have had two of the Generacs.
Yours is obviously connected to NG or appears to be.
So inside the chassis is a solenoid that opens into a chamber before the gas enters the carburetor.
My guess is that a bad pressure regulator will flood the chamber.
Example: When adding a NG/propane regulator to a gasoline generator you have an adjustment screw to regulate speed to set the hertz.
That is what you are doing when you close off the valve.
Too much NG/propane will flood the chamber in the generator as well as too little starves it.
You can read your installers manual and you can see that the inches of water setting on the regulator must be adhered too.
I would guess that your regulator has a ruptured diaphram.
I have see it before, and most of the time the generator will not run period.
A new regulator might be in order and start from there.
I did not comment on Youtube because they track your every move.
By the way, you have a earlier model and I too had one of these.
You just might as a precaution get you a spare Voltage regulator because it will surely let you down when you need it most.
Mine sent the 120 vac to 165 vac and blew a lot of items in the house.
I needed a rocker switch too as mine failed to lock.
Check with a dealer and get spares if you value your generator because it is one of the best ones to be made lately.
The new ones have too much electronic crap in them.
Example: Last week I had a orange led on that indicated trouble.
Instructions indicate a battery problem.
Actually it was just a battery check lite that gave me a start.
Foolish electronic junk added to get money out of owners.
 

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@gregg: A check of the Voltage regulators on Ebay indicates that the Voltage regulators's are discontinued.
Prices were in the $125 range, might better get one while you can.
 

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I agree, I would check into the regulator as well.

Can you just crack the ball valve and try starting again. If you can manually manipulate the valve and keep the generator running that would pretty much confirm a regulator issue.

I’m not a 100%, but it’s my understanding that a torn diaphragm would cause no fueling, not flooding. The diaphragm is spring loaded in a normally closed position until engine vacuum pulls it open. This makes sense as a fail safe.

It’s possible that debris On the sealing surface might be causing the regulator to not seal and cause a flood condition.
 

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just remember there are two regulators!
the one outside the case right by your ball valve you are shutting off and another
inside the units case as a demand regulator
this link has a few pix of them
https://apelectric.com/generator-parts/generac-generator-parts/fuel-regulators

use a pressure gauge to check the before and after the outside regulator.
yea I bet one or both are bad.

my guess is the outside the case unit is bad or the regulator feeding the house is set too high.
you need to check these or have them checked.
you will also need a brass 1/8 npt to barb adaptor for most connections $4.50 each
https://amzn.to/2P3zQwD

maybe use a gauge like these;

I use this one here flir makes this one
Extech HD755 Differential Pressure Manometer- 0.5PSI $204.00 on prime as of 02/17/2020
https://amzn.to/327lUqW

and the lower price units below;
simple dial style
https://amzn.to/2HuIfoz

digital
https://amzn.to/39IHt3z

REED Instruments R3002 Digital Manometer, Gauge/Differential, 5psi
https://amzn.to/2SCSFZP
 
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