Sparky,
If the grounded conductor opens at the generator it is no different than if it opens at the utility transformer. You cannot build an electrical system that is 100% safe from all failure modes.
As to the breaker oscillating, this will never happen because, in addition to one breaker not being able the operate the second one via a handle tie, a generator cannot produce enough short circuit current to cause a breaker to open.
Don (resqcapt19)
