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most of the PTO generators are actually 3600 RPM heads attached to a 7:1 gearbox. It still baffles me as to why a pretty much useless 400 Hz generator brings so much money.

I'm sorry to say, but for the cost of changing it over to something useful, you may be better off taking the hit and paying the fee. Unless you got such a great deal on it that you could scrap out the generator portion and sell off other parts to make up your money. There really isn't any...