could this potentially feed back into the line and shock someone working on the downed power lines?
No, the transfer switch will prevent this. In Diagram 3 the generator is not connected and would not be operating. The problem is that the EGCs (green) are not sized for, and therefore not permitted to carry, the unbalanced load current.
Wouldn't it preferentially go to the ground circuit/ground rod for the house?
No, this current should flow back to it's source, the utility transformer winding, by way of the grounded (neutral) conductor.
Ed
[This message has been edited by electric-ed (edited 11-22-2002).]
