[Lynn Eades]

Robert, you can do that motoring test with the unit in place as long as you take the belt off. (take the load off)
How the light works: When you turn the key on, the light comes on. (battery voltage) When you start up, voltage coming from the generator pushes in the opposite direction. This stops any power flow and the light goes out. (or nearly goes out)
The round tin on the top of the generator is the cut out. (I think) This opens circuit when the geny output drops to battery voltage and stops the geny from trying to motor when the key is off. The voltage output is adjusted by moving the 3rd (adjustable) brush.
If you drop the belt and "motor" the geny, and it runs, then it is in reasonable condition, so you shouldn't have to pull it out.
Make sure you have good earths on the components.
Thats about all I can come up with without doing some study.
Read up on it.