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So the generator frame is always connected to the ground rod and the 'bonding switch' lets you bond and unbond the grounded conductor at the generator as needed. When the generator is powering the house the 'bonding switch' is open and grounded conductor/grounding conductor bonding takes place...

Do you have a wire that connects your neutral (grounded conductor) to the generator frame? Is your ground rod bonded to the generator frame?

According to this the generator neutral (grounded conductor) is not to be bonded the grounding electrode system. However the generator ground (grounding conductor) is to be bonded to the grounding electrode system. In other words keep the generator neutral isolated from the generator ground...