im with diesel
i also have a 3 cyl diesel, im goin to run it on a 2/3 1/3 motor oil to diesel mix which i run in my mercedes and 7.3 f250 and tractor. im going to heat a 500 gallon tank of water with its water jacket and exhaust to make a heat battery for my home heat (boiler style). and to answer your dilemma, i would suggest simply using a pully so you can operate your engine a bit above idle and yet still achieve the 3000+ rpm on the IM generator with a small pulley. i may set mine up that way too because i dont want my motor to use much fuel since im using it for heat and im sure it can make 10 horse near idle.