Latest version of Mekanism (122), coal is consumed by the heat generator instantly, lava lasts about 10 seconds or so. Using forge 1232, lite loader 1.7.10_04, and a long list of other mods.

Normal. All fuel is turned into Lava in Heat Generators instantly. Been that ways since for a long time.

As for Lava not lasting long ... Heat Generators are the weakest generator type and very inefficient. Not exactly meant to sustain high output for extended periods.