I re-read you post (and mine), and I believe your points are not connected to ground -- they should conduct from the green wire (terminal #7) to ground when closed. Check the stupid simple stuff first -- have you set the gap with the distributor cam set so that the "point" of the eight sided cam is directly under the rubbing block of the points? If you set it to 0.030" at just about any other point on the cam, the points will never actually close, so the switchbox will never "fire" the coil.

Next, make sure you have the green wire connected to the moving contact on the points (the wire from the points connects to the green wire at the spade connector inside the distributor).

Also, check for miscellenous junk on the points themselves. A tiny bit of oil or grease can prevent them from conducting -- they are a trigger only and do not carry the main current like standard points do. Doesn't take much to keep them from working! I know, I've had fits with mine recently.

I'd get a small piece of clean paper or very thin cardboard (a matchbook cover is perfect). Open the points with a fingernail, put the paper or card inbetween, and pull it a short distance. Open the points and remove the paper or card. Don't just pull it out, bits of fiber will get stuck. Keep the points open and spray with carb or brake cleaner and check for continuity between the outer point and ground. Until they conduct and are connected to the switchbox, you won't get spark. Verfiy if you want by cranking the engine while watching the voltage on the green wire -- it must ocsillate between 12V and less than 0.1V. If not, the points aren't working.

Peter

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1972 220D ?? miles
1988 300E 200,012
1987 300D Turbo killed 9/25/07, 275,000 miles
1985 Volvo 740 GLE Turobodiesel 218,000
1972 280 SE 4.5 165, 000 - It runs!