If it were mine, I would get it running nice, and sell it on Craiglist for $100.
No way, no how, am I using a flat head, obsolete, with impossible to find parts for engine, as a backup generator. That thing, while well built, will suck fuel like no tomorrow. It will consume 100% more fuel than a similiar OHV engine.
Its cool, but its obsolete, and impossible to find parts for.
If the generator power head is in good shape, its probably high quality, good stuff. It would make a cool project to swap a later model OHV engine onto it, if possible.