Awesome info atomarc. We just put the screw driver in the high tension coil wire and grounded it, turned the key on and turned the motor over with the foot stomp starter, no spark. That should have caused the points to open and close and the screw driver to zap. I will give your technique a try.
Also on the side of the coil bracket their is a condensor of some sort. It attaches to the + side of the coil. What is this and could it be the cause of my trouble?

Thanks so much atomarc for all your help!