My understanding of the code which requires the grounds to be bonded to the panel and the neutrals floating on insulators is necessary for all panels downstream from the main service. My question is if the main service disconnect is solo (say, next to the meter outside) does the main distribution panel (say, in the garage) need to be configured like a regular auxiliary panel since it is downstream from the main service?
The “main” distribution panel (say, in the garage) is a distribution panel treated like any other remote distribution (sub) panel, with neutrals isolated from ground. Calling it a “main” distribution panel is not really the correct term. There is only one “Main” disconnect.
There used to be an NEC exception that allowed a 3 wire feeder to a detached structure and again the neutrals and ground were bonded together. There could be no other metallic paths between the buildings like a phone, cable or water line. This exception has been removed for new installations, but are allowed to stay if existing.
This is correct for a panel in the same building. In codes gone past it was permissible to rebond the disconnect at a remote building as has been pointed out.
We don’t need the word “main” to describe the service disconnect as there can be no more than six service disconnects. The word main could be talking about a disconnect for a remote distribution panel or the breaker that shuts down the entire panel.
It is possible for the main panel breaker to also be the service disconnect such as most will see in a residential panel.
To answer your question the only place that the main bonding jumper is allowed to be installed is at the service disconnect and in your case the disconnect outside. The NEC also mandates that the overcurrent device also be located either as an integral part of immediately adjacent the service disconnect.
The question I have is the service disconnect located beside the meter a breaker or fuse box?
There is “service” equipment (where the disconnect is located), and the is “other” equipment (everything after the service equipment). Neutrals are required to be grounded/bonded at the service equipment and must be isolated from ground everywhere else.
As Jim and Mike have indicated, there are some rare exceptions, but as an HI, you need not concern yourself with those.
One other thing to note is that on the line side of the service disconnect the neutral is used to ground the metal enclosures. So in the meter enclosure the neutral will also be bonded to the enclosure.