I forgot to mention this generator has around 7400 hours on it. I was trying to search the internet and found some comments on a marine site that said it's not uncommon for them to last 30,000 hours with some repairs. They weren't specific about the "some repairs" part and that's what concerns me.
My shop guy just came in and said he talked to a dealer and they said they commonly go to 20,000 hours with regular maintenance. That seems like a lot of hours.
I've spent a fair amount of time playing with small 2 and 3 cylinder diesel engines on tractors in the 15 to 30 hp range. I'm not sure how well tractors compare to welders-generators, but I'd say that 20,000 hours on any small diesel is extremely optimistic without major maintenance.
At least on tractors, it seems like many of these size engines begin having issues at around 3500 to 7500 hours when they've been reasonably maintained. It usually starts with a little bit of blowby, either with smoke coming out from the breather valve, or smelling fuel in the crankcase oil. Bearings start to wear. Injectors start to wear and need rebuilding. Overall the engine just gets tired and doesn't start as well, nor does it have as much power as it originally did. It starts to use a lot more fuel. Then then waterpump and alternator die, and the seals dry out.
With that said, none of these are real expensive repairs. A complete rebuild would still be cheaper than a new engine, and it should last at least another 5000 hours.