I would suggest doing some more research before you cut the wire from the points to the condensor... ( capacitor )... The blue coating is not produced by that condensor.. it is caused by the tremendous electrical forces caused by the electrical spark jumping across the opening of the points... a natural condition which allows the magnetic field in the coil to collapse and generate 40k plus of volts... usually radio suppression capacitors are placed outside the distributor... if you take out this item you will have greatly increased wear on the points... an effect the same as an electric discharge machining creates... the movement of material from one side of the points to the other... that capicitor is designed to cut off the spark to minimize that material transfer... so it needs to be working,, and of the proper Ohms...If you decrease the gap in the setting of the points you may reach a condition in which the coil does not have time between spark plug firings to completely recharge...not enough "saturation" time.... This is just my guess....

... Greg
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