My overload light comes on when I try to start my generator. Won't start

check outlets and wiring for corrosion or short

Check for short circuit or wrong wiring

No idea but somebody else will probably come along with a better idea then mine, seems a lot of these generators have this thing installed on them (Has $25 hard start kit). Not sure what it does or how it works. Strangely enough you said you use it for 240 volt. Looked at the picture and didn't see a 240 volt connection.
If you are using the what look like the 120 volt circuits you can't over load the unit. Maximum current draw will cause it to go into protection mode and shut down the power load. The following is an exert from the owners manual which I got from Yamaha's site. Link at the end of this post.

Hope this helps


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16
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q
760-029
AE00788
Overload indicator light
The overload indicator light
1
comes on when an over-
load of a connected electrical device is detected, the
inverter control unit overheats, or the AC output voltage
rises. The electronic breaker will then activate, stopping
power generation in order to protect the generator and
any connected electric devices. The AC pilot light
(green) will go off and the overload indicator light (red)
will stay on, but the engine will not stop running.
When the overload indicator light comes on and power
generation stops, proceed as follows:
1. Turn off any connected electric devices and stop
the engine.
2. Reduce the total wattage of connected electric
devices within the application range.
3. Check for blockages in the cooling air inlet and
around the control unit. If any blockages are found,
remove.
4. After checking, restart the engine.
http://www.yamahamotorsports.com/assets/service/manuals/0/LIT-19626-01-23_1423.pdf

check if there is any fuse, if it has change it

Check all the fuses. Sounds like the inverter section has gone south

The toggle switch automatically resets all faults when it is turned to the off position. I would turn the toggle switch off, turn off the breaker on the generator and then turn off all the loads in the house except a few lights. Turn the generator breaker back on, then turn the toggle switch back to automatic. If it starts and stays running, you were overloading the generator. Turn on other loads slowly and keep track of what is on so you don't overload it again. If it still does not stay on, you may have a problem with the panel. Let me know what happens.

most likely the fuel is flooding. Let it cool out, and then try a restart.

You may be UNDERLOADING the generator and it may be unstable with such a light load... see if it might behave running a heavier load... put a 100 watt light on it as a test,

ARE SURE ITS THE OVERLOAD LIGHT AND NOT THE NOIL ALERT? IF ITS THE OIL ALERT ITS CAUSE YOUR LOW ON OIL OR THE SENSOR INSIDE THE GENERATER IS BAD?

Check the Ground Fault Indicator circuit breaker for triping, and look for the high limit on generator. Reset the main breaker by triping it full right and then back. Vitally