Help needed with Honda EX-650 generator

Some time ago, I acquired a Honda ex650 generator that is in very good condition over all. I'd never had any need to use it until we had lost power in the house one day. My son was doing laundry, and was in need to finish drying his clothes so he could go to work. Thought I could help out by using the generator- for the first time. It started up great, and when I plugged in the dryer (it was connected to a heavy duty extension cord), the dryer almost immediately popped and began smoking. It had burned out. Out fuses and wires. I retried the generator on a few old junk electronics and received the same results. With that, I put the generator away until recently. I called Honda, the tech told me that if the generator had not been used for a while, it probably lost its magnetism and would require "Flashing". I've taken it to an authorized Honda dealer; and they told me (after $125.00 testing) that it would need a condenser. Also that a bulb would need to be replaced. Would a bad condenser cause these problems? He also mentioned a compacitor, but he may have mis spoke on that. They're stating this fix to cost $402.00 (includes the 125.00)! Hard to believe this, and hard to imagine that the generator would be worth that. Would appreciate any further advise, or expertise. Thanks