I'm assuming that this is a Kohler? The 2 outer terminals on the voltage regulator are fed AC from the stator under the flywheel. If these are shorted, then you will need at least a new stator and sometimes a flywheel. You should be able to unplug the connector, run it up and get 26 ish volts set on your meter's AC scale. If you find that you have the need for a stator, pull the flywheel before ordering parts as sometimes the magnets let go from the underside of the flywheel. The center terminal is DC from your battery via your switch. If this doesn't match your system- post engine model info.

Thanks for the reply! Yes the motor is a Kohler. The VR has a short from B+ (battery) to one A.C. terminal. Would that still indicate a bad stator?

Test the stator as directed above for output. If you are looking for a short to ground, you should be checking each wire individually.

It was indeed the stator! Looks like a magnet broke loose and killed the stator. The only problem is that I can't find a part number on the stator. There is no identification on the engine type either other than Kohler Command 27 but it seems there are multiple variations of that motor. Can someone help me identify the correct stator and magnets to purchase? Thanks!