Fastback,
First, if you want to turn the engine over without starting, use S-10, the Dead Crank Switch. No need to stuff rags into the intake. That's what the S-10 is for. Well, that and when you place it in the OFF position, you can not turn the engine over at the S-1, start switch. Its a safety feature. Keeps someone from starting the thing when you have your head or arm stuck in the works.
Second, did you adjust the start/stop lever? Dont forget that. Is a step needed to adjust each fuel rail and start/stop lever. Its in the book. There is also a procedure in the file I put in SS for all the manuals you need to work on generators. Take a look at that. You should be able to disconnect the start/stop lever and control it by hand. But be very careful about that. Chew on that a while, and see if there is something you can use.
Guy