Even if it's not what you want, could you please try dsp and dma too? I just want to know whether it eliminates the lag. If that does help, it's definitely an issue with the other sound driver (models). If that does NOT help, try --without-sdl-audio please. If that eliminates the lag, it's definitely an issue with SDL or at least the way it's used in Generator. If that does NOT help either, there must be some general timing flaw in Generator. If it uses about 10% CPU or even less, then it's clearly not a performance issue.
A lag of about a second sounds really bad though. There's one thing you could still try then. In main/ui-gtk.c comment out nanosleep that is change
nanosleep(&ts, NULL);
to
/* nanosleep(&ts, NULL); */
or remove the line temporarily and recompile, just run make again. It's possible that the CPU time saving causes some heavy delay for you.