I think you may have a situation that is, IMHO, a bit of a Code oddity.
Were you sizing a feeder to supply the motor and transformer
2/0 would be acceptable per 430.24.
Service conductors, on the other hand, are required to be sized by the OCP device (where there is a singular device) so you 250 amp breaker would require a 250 kcmil as a service conductor.
You grounded conductor to the service based on the 250 would be a #2 based on 250.24(C) & 250.66.
Your equipment ground to the load side could be reduced to a #4 per 250.122.
Note:
I went back to the NEC to substanuiate the above by Code reference as I was working on what I had previously learned, however, Exception 1 to 230.90 leads me to believe the above info is incorrect. As I read that exception, you could size the service conductors the same as the feeder.
Hopefully we will get some more insight.