Might try this (make sure your not 180 out)
To avoid getting lost in all the wiring issues, disconnect ALL wires from the (-) terminal of the coil, then connect a separate "test" wire directly from the hot (negative, on your car) to the (-) terminal of the coil, and make sure the (+) terminal on the coil is the one that is connected to the side of the distributor, and crank the engine for a spark test now. You have now eliminated any possible wiring errors, ignition switch problems, ballast resistor problems and the like.
If you STILL get no spark from the coil, loosen the test wire at the coil end, and tap the wire on the coil (-) post momentarily (it's only 6 volts, you can't get a shock), but you should see a spark at the end of the wire when you do this.
Two possible results can occur here: If you DO see the spark at the end of the test wire, the points are either closed (which may be OK) or shorted (which ain't!). On the other hand, if you do NOT see a spark at the end of the test wire, the points are either open (which also may be OK) or the distributor ground is not making contact (which ain't either !)
Now we have to sort this out: If you see the spark at the end of the wire in the above test, next remove the distributor cap and watch the points while you bump the engine over a bit at a time until you get to a place where both sets of points are open (or stick a piece of paper between each set of points.)
Now we KNOW the points are not what is shorting the (+) terminal of the coil to ground. Repeat the wire tapping test, if you still get a spark from the test wire when you tap it on the coil (-) terminal, we know there is a short inside the distributor.
If you get to this conclusion, you'll have to do some detective work here. Inspect the wire that connects the side terminal on the distributor, through the side wall of the distributor, and to the points connections. Make sure that wire is not frayed, or touching anything metal. If there is any suspicion, disconnect it and see if the short (the spark in the above test) disappears. It is also possible that the condenser INSIDE the distributor has failed, and is causing the short.
Back to the first test: If you did NOT see any spark when you tapped the test wire on the coil (-) terminal, take the distributor cap off and watch the points while you bump the engine over a bit at a time. Stop when you can see that at least one set of points is in the closed (making contact) position. Now try the first test again - see if the wire makes a spark at contact on the coil (-) terminal. If it does, the points are OK, and the grounding is OK, so you can relax about the engine ground.
This is a bit off the subject, but the grounding wire from the engine to the body is there to give better grounding to the body - the battery (+) should be connected directly to the engine block or head, and because the starter cranks OK, we know that connection is good. The wire to the body is a good thing, but it does not affect the problem we are hunting down here.
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