Thanks to all who have responded with suggestions. I have finally resolved my issues. I removed, disassembled and cleaned the 40250 ATS. After reassembly, things were better except the ATS was still dropping contact when on generator with a load of over 20 amps. I tested the generator output under load and found that voltage was dropping below 100 volts. The 40250 ATS is designed to drop out if voltage drops below 105 volts, so it was doing what it is supposed to do. I ordered and replaced the circuit breaker on my Onan QD8000. Now everything is happy and functions as it should. If anyone is in need of a 35 amp two pole circuit breaker that Onan used on the 7.5 and 8K generators, I found it on Amazon from the OEM manufacturer (AIRPAX, IEG66-28333-2-V) for about 2/3 of what Cummins wanted for it.
All's good that ends well.
Richard