I tore down the top end this morning, between stints on baby care duty. This is what I found:
This is what the number two cylinder head looked like (above)...
... while this is the number one cylinder head. Notice the difference in carbon deposits in the (smaller) exhaust valve holes.
I think this genset was overdue for its thousand hour decoke, is all. Everything else checks out. The cylinder walls don't have a single score on them, and you can still see the factory-made honing marks.
So, assuming we can hack this, and I'm sure I can, we just bought a generator worth several thousand dollars for only $400.