"why would you create a separately derived system within 10' feet of the main panel?"
Isn't that what you did? It should be treated as such.
I'm maybe a little lost in how you have this set up. Is this an ungrounded delta secondary? This statement confuses me too.
"I landed the neutrals from both the main panel and the switch to the HO buss" The "switch" on the secondary side? Where does this second neutral come from?
And this: "The inspector looked at it today and asked that the neutral and equipment ground be removed between the Main panel and the transformer, and install a second cold water bond for the transformer HO terminal and bond between the HO and the case with the equipment ground." That makes it sound like a Delta-Wye secondary.
It also sounds like the ground for the tranny case, and system is dependant on the EGC. A #6?
