Matt, it sounds like an ignition issue alright, and from the tests you have done, it seems to me that the flywheel is going to need to come off.
you can try this: Once you get to the flywheel, remove the top nut, and take off the cup, then put the top nut on, to that the top surface of the nut is level with the top of the crank thread.
Now, get two long, large flat screwdrivers, and lever the flywheel up from the sides evenly, if it still wont move, then get an assistant to put pressure on the screwdrivers (not hard enough to damage the engine though) and give the nut/crank a few firm but not too hard blows with a wooden or rubber mallet.
if that does not work, soak in penetrene and repeat, if no luck then, move onto a puller.
