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I doubt the transformer has an issue. It is just windings in an iron field. The primary side windings are the output of the generator, when the load increases, the magnetic field increases which increases the voltage and current on the secondary. This increase helps to stabilize the output...

3M ohms in one way and 12M ohms in the other is a blown diode.

Check voltage at terminal board A1, connection 8 with the main switch in the run position, engine off. It sounds like it is getting 24 volts there in the run position, it should only be there when the engine is cranking. This flashes the field and engages the starter, it is fed by terminal...