This one sounds like burned/dirty points. The test light will show voltage all the way to the points in this case, which shows you've got a good circuit. Take the distributor cap off, bump the engine over with the starter, or turn it with the fan until you see the points open, then touch a jumper wire from the distributor primary terminal to ground. You should get a spark from the coil wire. If the points are discolored, you could try cleaning them, but a simpler, and more effective fix is to replace them. Put in a condenser while you're at it. They're inexpensive, and hard to test without some pretty sophisticated test equipment. Once the points are contacting properly, the test light should be off with the points closed, on when they're open. if the points aren't opening when the distributor shaft turns, the rubbing block has worn, and you need to adjust the point gap, or dwell, if you've got a dwell meter. (More accurate with a dwell meter).
Jerry
