Fixed it. It was a shorted variable capacitor. Thanks to everyone who provided assistance.

Here is my logic flow, process, whatever, on how I found the problem in case someone else runs across similar issues with this model or other generators.

The problem had to be in either the sine shaping network or sine shaper amplifier section. I decided to isolate the sine shaper amplifier by cutting the lead on L1 on board A2. I then probed TP6 on A3, this showed the correct sine wave display. So the problem is in the sine shaper amplifier. I powered off the device, and noticed a 0.2 ohm resistance between the connected side of L1 on board A2. The short was traced to C3 on board A2. For whatever reason, the plates on the trim capacitor were touching each other. I fixed it by rotating the screw so the plates no longer touched and soldering the cut lead on L1.

How important is a working C3? The service manual states it is for adjusting frequency response of the sine wave output. The output looks OK to me but I do not have a reference sine wave source to compare with. Is this something I should be concerned about?