I've searched the forum on this subject, and only found agreement that the valve clearances should be checked every 1000 hours. I'm due (1200 hours right now). Is everyone really doing this? The manual also calls for injector testing at 1500 hours.
Brett,
No first hand experience with your generator, but lots of hands on experience with small Japanese diesels in marine applications-- Yanmar, Kubota etc .
In a word, YES, it needs to be done. Not uncommon for clearances to be many thousands of an inch loose. Hammers parts and less valve lift.
The other Brett
As Brett says, the valves must be adjusted. Not hard to do. Typically, intake valve clearances tighten up until they reach zero. This makes cold starts hard. Any change from factory clearances also changes cam timing. Tight exhaust valve clearance means fewer crankshaft degrees closed every two revolutions so less heat is transferred to the valve seat. Higher temp may cause the valve to warp and not seal as well. While diesels don't usually burn valves, it can occur.
Pierce
I find on both the Kubota & Perkins (built in Japan) small diesel engines, no panic to adjust valves before 4 K hours. Or about 150 K miles. While less experience with the Isuzu but would sure recommend close attention to every part of it often. It is not a Kubota in any sense.