Judging by the photo it appears that the points are closed when they should be open.
(Based on your photo of the distributor)Move the engine around till the tab on the points is on one of the high spots on the distributor cam. Loosen the screw closest the side of the distributor. The screw next to the contacts is what you use to adjust the point gap with. While turning the adjustment screw use a .016 feller gauge (or a match book cover) to set the gap with. You want a snug fit.
There is a possibility that the points are corroded and need to cleaned. You can use a file card like the girls use to file their nails with. There is also possibility the the condenser -- the round item inside the distributor -- is no good. I would replace both to eliminate this as a possibly source of the problem.
If you have an ohm meter check the points while their open for continuity. If you have continuity while the points are open then the points are shorted out and you will get no spark.
The rotor -- the item sitting on the top of the distributor shaft -- might have a tiny crack in it. A tiny crack in the rotor will act like a wire and redirect the spark to the distributor shaft rather than the distributor cap. A crack in the distributor cap could do the same thing redirecting the spark the distributor's edge. A cracked distributor cap can also cause a consistent miss when the engine is running.
I hope this helps I'll check back and see if you have spark yet
Walt Williams
La Verkin, UT
