Most likely the stator is open or shorted. When those two wires shorted to the frame the gen would have produced as much amperage as it possibly could have until either the wires burned up and lost contact with the frame or the stator burned up. your best option for troubleshooting, assuming they are stator wires, would be to use a digital multi-meter and ohm out the stator to see if it is open.
to do this you will need the schematic to find out which wires go together. if it is a 240v single phase generator there will be 2 power wires and 2 neutral wires. hopefully they have numbers on them, if so take the corresponding power wire and neutral and ohm them out. if it says infinite or open you might as well buy a new gen.
those portable generators sometimes have a capacitor that helps feed the rotor, if this is the case checking capacitance would be a good idea. If the capacitor top is open or leaking fluid at all that may be the cause of the problem.
The slip rings may have also over heated causing the brushes to crumble losing contact with the slip ring. if this is the case then no field would be produced and no voltage.