The interior parts of the coil are not grounded. Isn't the coil outer-body isolated from the internal components and the two lead posts?
The distributor body should be grounded to the engine block. The engine block should be grounded to through the clutch housing which is grounded to the frame.
New points and coil (as posted above) and checking the insulator around the lead-in bolt on the distributor (as posted by Don) seem to be your best first steps.
