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Don't get hung up on the 100A main breaker rating Vs the 50A breaker feeding your equipment. Go to the top of the Generator forum and read the 002 003 Main Breaker sticky that Sewerzeuk posted long ago. It explains the difference between the breakers in these machines and your typical thermal...

When backfeeding into the 50A breaker in the house, are you able to load up the generator and get it up to 100% without tripping the breaker? This is assuming the house has 240V loads big enough.... What gage and length is the wire you have running from the generator out to the garage? Do you...

Ah, well that's not quite how I interpreted your original post. If it's fine with no load and the breaker turned on, then frayed wires isn't the problem. A proper operating 003 will just barely start most 5hp motors without popping the breaker, depending on how much load it present at start up...

Agree with everything above. Sounds like a frayed wire shorting to the chassis, and yes the frame could very well become energized and be dangerous to touch. Since this only happens with the breaker closed I would open the side of the AC reconnect box and check for mouse damage. Then look at...