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While the flywheel location would alter the timing, it wouldn't stop the creation of spark. That is unless the flywheel places the ring gear at a spot distant from the sensor.
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In this case, no spark was created b/c the Sensor was too far away from its correct position after using the spacer; the spacer had to be shaved down a bit.
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I don't know what the arrangement is on the M102/M103 engine, but you CAN get the flywheel on wrong, the offset in the bolt holes is small enough that the neck on the flywheel bolts will allow installation at any position if you screw them partly in and wriggle it around. If you finger tighten each one as it goes in, the offset bolt won't go in if the flywheel is in the wrong position.
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Just to defend my position that you can't install the flywheel incorrectly: I've attached a picture of the flywheel installed. You can see the 8 flywheel bolt heads. If you remove the flywheel, you will see 9 holes at the end of the crank. If you flip the removed flywheel over to see its other side, you will see 8 holes plus 1 "dowel pin" (for lack of a better term) between two of the holes and within the same arc.
Anyway, for a full story, check out
this thread. The link is a post to the summary of what I've done, plus extra links that talk about the hiccups I encountered.