Daddy,
This sounds like something I have seen, but the description is not completely specific.
Do you mean:
When I switch off the APU (genset) all the house lights go out but the APU keeps running.
or
When I switch off the APU the lights on its panel go out but the unit keeps running.
Or other, please be a specific as possible.
Remember, older diesels are complete (we have Zero product specification here) are completely mechanical and the electric controls are just add-ons for operator convenience.
Possible answer to the first case:
The house bank is dead and the APU starts on the main engine battery, but the shutdown solenoid is jammed so the unit won't shut down. The AC machine excitation may be supplied by the control circuits. So, when the unit power is turn off it stops producing power.
Second case is largely the same as the first, but the house bank is good and your just have a problem with mechnical shut-down on the APU.
I saw a lot of this sort of thing working o boats until the economy crashed.
Matt