Generator question - let carb run dry or keep it wet?

joebedford wrote:

Gas coming out of the air filter sounds like a stuck carb float to me.

Or the needle valve associated with it.
When that happens more than once, the carb needs to be rebuilt.
Fuel going into the crankcase can scald the bearings and fry the engine.

The general recommendation for seasonal storage of any engine is wet with stabilizer. Fuel valve OFF if it has one.