Triple Jim
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It's not likely that gunk and rust account for the low output. Look for something else wrong before you put it back together. Could the stator have been rewound and some coils are connected backwards? Are the magnets still strong? Was your AC measurement made with the stator open-circuited, or while connected to the regulator? If the regulator has a shorted diode, it would drag the AC reading down. Is your meter OK? I'm just throwing out ideas, but something is wrong besides dirt and rust.