Jake,
I've heard of brushes wearing very quickly and your problem could be just that if you've used brushes made of very soft carbon compound.
Your tensioning springs are OK.
It is also not unusual to see a bit of sparking between the brushes and the commutator as they settle in.
One of the brushes will be earthed and the other connects to the generator output. In either case it doesn't matter if the bare wire touches the brush carrier because the brushes themselves are electrically conductive. Have a look at the brush carrier on the active side and you'll see that the whole thing is separated from the housing by an insulator.
I found this on another site -
Brush wear comes from two basic causes: mechanical friction and electrical wear. Mechanical friction is caused by the rubbing of the brushes on the commutator or slip ring. Electrical wear is caused by the arcing and sparking of the brush as it moves over the commutator. Mechanical friction increases with brush pressure; electrical wear decreases with brush pressure.
For any given brush installation, there is an optimum amount of brush pressure. If the pressure is decreased below this amount, the total wear increases because the electrical wear increases. If the pressure is increased above the optimum amount, the total wear again increases because mechanical friction increases.
Always make sure that the brush pressure is set to the manufacturer's recommended level. If wear is still excessive, you should investigate the type and size of brush being used. Remember, current density (amperes per sq in. of brush) must be correct for the application. Proper current density is required to make certain that a lubricating, conductive film forms on the commutator or slip ring. This film is composed of moisture, copper, and carbon. Insufficient current density inhibits the formation of this film and can result in excessive brush wear.
Also, very low humidity environments do not provide enough moisture for the formation of the lubricating film. If excessive brush wear is a problem in such an environment, you may have to humidify the area where the machine is operating.
Hope this helps,
Chris
PS: I've attached a photo of my generator brushes.