Some quick thoughts here.
What is the ambient temperature where you are "cranking" the engine?
If the conditions are extremely cold, you may not be able to physically spin the engine fast enough for good spark production due to engine simply being hard to turn.
As to the kill wire having an effect, you will have to trace the kill wire circuit path and any switches to determine if the kill wire is being grounded by a chafed wire or possibly a flaky kill switch.
Gen sets not used in construction or other venues calling for regular active duty are often beset by mice or other rodent activity, including chewing of wires and other parts.
If this gen set features some type of oil sentinel system to shut down the engine, or at least prevent starting in the event of a low oil level condition, that system might be the cause for the intermittent spark, but that should apply only with the kill wire connected at the magneto. Disconnecting the kill wire at the magneto should defeat any such spark stop devices from affecting ignition.

Thanks for the quick response,Temperature is 15 degrees and I am turning it over by hand. No spark what so ever with kill wire connected, and only intermittent spark disconnected.

Well, as I said before, you will need to inspect the entire length of the kill wire circuit looking for a bare spot that is shorting to ground and stifling the spark.
"By hand" do you mean yanking on a pull start rope or are you simply putting your hand on something and giving it a spin while you watch for spark?
Gen sets have a fair amount of mass to accelerate and temperature of 15 F is not going to make it any easier to spin it up to a good cranking speed.
Does the engine have summer weight or winter weight oil in it?
Having oil that is too viscous will certainly make it difficult to spin up to cranking speed.
I am not familiar with this particular magneto but some magnetos have rudimentary electronics inside and the minimum cranking speed specs on those is based on the RPM threshold required to make the electronics operate in order to manage spark generation and spark discharge.
I am suspecting too little cranking RPM here for consistent spark output. Perhaps you might know "an 800 lb gorilla" you could get to pull the rope while you watch for spark.
I don't even know how you are testing for a spark but you should be checking with a spark tester or inserting a good spark plug into the spark cable boot and then ground the metal spark plug body onto the engine and watch for spark in the electrode gap of the plug.
Or you can insert an insulated handle Phillips screwdriver into the boot and hold a part of the metal screwdriver shaft near a metal engine part while you watch for spark.
If you are not removing the spark plug from the engine to spin the engine that also may be keeping the RPM too low for a good spark test. And I know that you can't run the engine without a spark plug...........but at least that might allow you to get enough RPM to see if a consistent spark can be attained.

to f/u on Mownie's warning about mice damage, might be a wise idea to pull the engine cooling shroud sheet metal off to a) clean cooling fins, if needed; b) closely check all exposed wiring for damage/cracks/etc. ....
Guessing that engine has a fixed governor and a simple on/off
switch, would also chk that area closely for damage/etc.

If the unit has been exposed where it could rust - or has been washed down to clean in the past - then also look for corrosion at any elect connection on the engine.
Question - how are you testing the spark condition?

I am spinning it by hand with the spark plug removed. With kill wire removed I get some spark only if I spin the engine backwards, none the other way. I am using 30 weight oil per manufacture. I pulled the kill wire completely away from the engine while spinning it. There are no visible nicks in the wire but, I measured the wire to the engine and have 394 ohms. Is that normal? What does that wire go to. There is a plate on the bottom of the engine with two screws that when you start to remove it oil comes out.

I found a engine diagram showing that the plate has four screws not two and it goes to a low oil shut off switch. So I guess my question is what resistance should I see when the oil is full, which it is.

Is it a low oil LEVEL switch or low oil PRESSURE switch?
It would be either open or closed.
IF a pressure switch, it'd likely have some circuitry to bypass it during cranking, else you'd never have spark.

Do you have an engine service manual?
IF not, click the link.

Here is a link that might be useful: Service manual

Let me try this one more time.
***"I am spinning it by hand with the spark plug removed."***
Does that mean you have your hand on a pull rope"?

***"I measured the wire to the engine and have 394 ohms."***
So, the wire you refer to......is this the wire that you have disconnected from the magneto (ignition coil) or is this a wire that is PERMANENTLY connected to the magneto? You have to understand that we can't see what you are doing and a skimpy description might not illustrate your thoughts as well as you think it does on your end of the dialogue.
If the wire you are checking with an ohmmeter is the kill wire that is disconnected from the magneto......and the KILL SWITCH is in the RUN (ON) position, 394 ohms tells me that there is some continuity to ground and that the engine would likely have no spark if that wire were connected to the magneto. A good kill wire circuit tested from the end of that wire at the magneto (disconnected from the magneto) to a good clean bare metal surface of the engine should show infinite resistance (open circuit) when the kill switch is in the RUN (ON) position. The same wire when tested with the kill switch in the STOP (OFF) position should give a very low ohms reading, indicating that there is excellent continuity through the wire and switch and back to ground.
On the other hand, if the wire you are checking is a lead coming from the magneto......I would say that the magneto is defective based on the fact that the kill wire functions to ground the PRIMARY COIL inside the magneto and the primary windings of that coil of wire are big enough to give ohms readings of near to zero resistance.

About the so called "plate on the bottom of the engine with two screws that when you start to remove it oil comes out":
What has prompted you to mention this? Are there some wires leading into this plate?

Perhaps it is time for you find some engine identification like model number/serial number/spec number and post that.
Can you post a picture of the oily plate you mentioned?
EDITED: AFTER I posted this I noticed that Bill and the OP had engaged in the discussion, but I am letting the content of my above reply stand as there might be something in it of benefit, or maybe not :^)

This post was edited by mownie on Sun, Jan 5, 14 at 14:50

I ended up cutting the low oil level switch wire and put everything back together and it runs. I plan on ordering a new switch and all should be good. Thanks for all the help.

OK, good show.
Per the Tecumseh manual: For winter use below 32F you can use 5W30 or straight 10 weight motor oil.

Mownie,
I hardly post on this forum but have been reading for over 10 years. I'm consistently impressed with the amount of patience and knowledge you afford to others. I appreciate what you do for others, myself included. Thanks.

It sort of comes natural for me. I have had to train or coach a fair number of mechanics over the years where I work and the biggest difference in doing it online is that I can't reach out and "Gibbs smack" the back of their head :^)
I am not the last word on here either, I just try to do my small part as much as possible, and hope it helps someone.

Second that! The mowster is a good egg!

He has a cute butt too!!!!!!!

Just kidding!!!! It is nice to recognize someone that has been on the forums, for a decade or so, helping folks for free!!!!!

Rarely do those guys get any credit or recognition.....

Congrats Mownie.

Back in the day, Spike ruled with an iron fist, but that is what made this forum successful............