I wouldnt sweat the CO problem. i mean your not sleeping in there. the only problem you would have is if the exhaust builds upto the point it chokes out the genny.. If the shed has windows and a door you wont have a problem. just open the door and face the exhaust towards it. Honda is clean running so dont sweat all the soot and stuff ..

Great advise on the security though, that generator is easy to walk away with. using a chain or cable both work but remember a bolt cutter can get by the cheap stuff fairly easy.

The thing to remember when running the generator is that if it is rainy or wet outside you got to keep it dry, moisture kills alot of them prematurly. so keep it in some sort of shelter even if its just a tarp.

As for storing the gas with the gen. not a problem, and to keep the gas fresh, stabil is great but if your running it every other month, just put your gas cans on a rotation cycle and dump the gas in your car and refill. I keep approx 20-30 gals on hand all the time and keep it on a rotation, gas will stay good longer than the general concensus but if it get to old your genny wont run that great. so best advise is to keep it fresh.

Oh and just running your generator doesnt do the whole job, you need to put it under load, the windings on the gen. will get rusty and loading your gen. cleans that off. I like to grab an electric heater and turn it on high. also remember to allow it to run with out a load on it when your finished to cool things down..