I'm in the process of remodeling my basement. I have an unused panel downstairs that only has 3 leads into it. I plan on installing a 100 amp sub in it's place. The original panel was 100 amp for a dryer and A/C that is no longer used. My question to the electrical geniuses that frequent this site... do I need to run a ground back to the main panel? (difficult in finished basement). Can I make the 3 existing wires 2 hots and a neutral and add the ground with a 5/8 rod driven outside? I do understand the separation of neutral and ground in a sub, but can the ground be separate from the main?
uggg

....*facepalm*
First off, grounding electrodes and EGCs ARE 2 COMPLETELY DIFFERENT THINGS! People get this confused almost everyday and I explain this on here at least twice a week.
A ground rod DOES NOT provide a ground fault path for the breaker. Grounding electrodes are for grounding lightning ONLY. A ground rod will do NOTHING FOR U HERE!
While yes this is an old feed, anytime u change electrical it HAS to be brought up to current code. Old code allowed 3-wire feeds. Now 4-wire feeds are required! With one exception, code does NOT allow the ground wire to be separate from the circuit wires.
If u will be replacing the panel, your gonna have to either: A) run a green ground wire ONLY if the feeder cable is individual wires such as THHN and DOES NOT have an outer jacket or b) run an entirely new feeder with 4-wires.
Aceman understood your question perfectly.
And BTW, ground rods are only needed at the main service and detached buildings!