If you are using a three prong welder plug you have two hots AND A GROUND ...not a neutral. If you have a three prong welder receptacle that is wired -two hots and a NEUTRAL it is wired INCORRECTLY!! Your welder does not need a neutral if it is 220, neither does your compressor.
Codes have changed and now require dryer plugs to have four wires...two hots, one neutral, one ground... even if the dryer does not need a neutral.
You say you have a "dryer type" plug. If it was originaly wired for a dryer it might have a neutral conductor from the recep to your electrical panel. It might have a ground conductor that is grounded to the box the recep is in.
As far as the ground rod goes... you probably have one, as it is required for your service to be grounded and it is usually located underneath your meter enclosure on the outside of your house or building.
The ground and neutral are bonded together at the first point of disconnect.
From that point on they are seperate as the neutral carries the "return path" for a 120 v. circuit and the ground only sees current in the event of a short.
Without going into the theory of electricity you aren't actually consuming the current but merely using it. The 120 circuit path is current out on the hot... current return on the neutral. A 220 circuit relies on the phase "imbalance".
This is a kindergarten description, and its really more complicated than that.
If you have a welder receptacle, you should wire two hots and a ground. Depending on what you use for wire (conduit and wire... or romex) you should only have three wires... two hots and a ground. If you have romex (or some other bundled cable) that has 4 wires you do not need the 4'th one and it can be cut off and capped on both ends.
Check your panel... and if the recep you are using has the third wire on the neutral bar... you should remove it. If it is white in color you should tape it with green and transfer it to the ground bar in your panel. You should also tape the recep end of the wire green to indicate to someone in the future that it is a ground. If the third wire is bare copper make sure it is on the ground bar in your panel NOT the neutral bar.
If the third wire is on the neutral bar it will still run... but that is a code violation to have it wired that way.
Last edited by JaggedEdge; 11-28-2009 at 06:52 PM.