Doug Miller wrote:

Multiple code and safety violations:
- The existing ground conductor is almost certainly uninsulated and therefore
unsuitable for use as a neutral.

Valid point.

- The ground conductor at the shed would not be tied to the service entrance
ground and could therefore be at a different potential. Google on "ground
loop" for information regarding the dangers.

Around here (Saskatchewan) separate buildings are allowed to have their
own ground rods and a ground line is not required to be brought with the
feeders (although it is allowed to omit the ground rod and bring ground
in with the feeder lines, as long as the building doesn't house livestock).

Looking at the online 2005 NEC, 250.32 B(2) seems to discuss this case,
in that it describes what to do with the "grounded conductor" when a
"grounding conductor" is not brought along with the supply. Am I
missing something here?

Chris