Howdy Mike,
Lucas E3L's are very robust units, have run one on my Red Rap, first with a Bell elec reg and now with a PODtronic - the latter a lovely device I have on quite a few other machines - and would not give up on it just yet. But, they do not like oil or oil mist internally and will glaze the brushes and grease up the commutator very quickly.
If you've very effectively sealed your power unit (emphasis on join between generator drive end and back of primary) and your crankcase breathing arrangement is a bit dodgy, then your motor will attempt to breath through your generator drive if you do not have a lip seal on the genie drive end waft mist over the brushes .
Mine succumbed to the above scenario, fitted a lip seal and a PCV to the breathing system, now back in business. As mentioned at JTAN, PODtronics (and many elect reg's) control output voltage via the field coil ground and are sensitive generator case grounding to the power unit. Powder coated/2 pack painted cases can cause grounding problems if the generator clamp not directly in contact with the E3L exposed metal drive end. If in doubt, lay flattened piece of soft solder under clamp where it rests over the drive end.