You're not getting exciter field current from the usual source. When you hold the switch in the start position, current is supplied to the exciter from the 24v battery. In normal operation it comes from the X windings of CVT1 (X1, X2, X3), goes to the diode board to be made into DC, then straight to the exciter field. The output from CVT1 is controlled by a small current from the regulator board that goes through the control winding of CVT1 (terminals C1, C2). Some possible causes of the problem:
1. Failed X winding of CVT1
2. Failed diode board
3. Regulator failed and is putting out full control current to the control winding of CVT1 (terminals C1,C2)
"1" can be checked by measuring the resistances of the X windings per the -34 manual.
"2" can be checked by testing the six diodes on the board.
"3" can be checked by disconnecting the wire from terminal 17 of the regulator and taping the end so it doesn't make contact with anything. Then run the generator and see if you get power. If you do, it'll probably be 170/340 volts or something near that.
When you're checking the resistance of the X winding of CVT1 it's probably worth checking the other windings of that transformer too.
I don't think the exciter has a problem because in the start position the current from the 24v system is applied to the exciter, and that's giving you power output.