I was wrong in my previous post. There is a solenoid style relay in the breaker panel that is normally closed when the generator is off or shoreline is disconnected. When closed, this completes the 12 volt feed to the panel fuses from the battery. When 120 volts is present, the solenoid opens the relay and allows the convertor to feed the same 12 volt fuses with the battery now disconnected.
I oiled the plunger and the relay button and got them both to loosen up, now everything works like it should.
The connection to the generator had nothing to do with this problem.
Here is a good site to look at converters- http://www.bestconverter.com/MagnetekParallax-to-Ultra-III_ep_8-1.html