I'm thinking that the "carbon build-up" is being caused by current arcing.
Perhaps one of the sets of contacts are not properly adjusted. (Some voltage regulators were adjustable, some weren't.)
A certain amount of carbon on the armature itself would be normal ... as that is just the brushes wearing. Check the spring tension and the remaining length of the carbon brushes. If there's a problem there, it might lead to intermittent output from the generator itself. I would think that the regulator would be expecting to see fairly consistent output from the generator, and if it wasn't ... it would be working overtime trying to do it's job.
Here's a link
to basic operation.