My 12" mower did not have any kind of timing mark on the flywheel. It would have been nice to have one. I timed the flywheel by varying the breaker gap until it hurt my fingers a maximum amount when I flicked the flywheel while holding the plug lead. If I recall correctly I couldn't feel any difference between 0.012" and 0.015", so set it somewhere in there. I timed the crankshaft so it was slightly before TDC when the points opened. It didn't kick back at all, so I probably could have advanced it a bit and improved the cold starting. If by 5/32" you mean as measured by piston movement, that may have been about where I ended up.
My mower looked the same as your 47 model except I do not think the end of the exhaust pipe was squeezed flat. (Quite possibly a former owner disliked the squeezing and panel-beat it round, of course). My fuel line did not look like yours - I think it was a clear plastic tube. Sounds as if that may not have been original either. There was some kind of challenge in getting the starting sprocket on the end of the crankshaft to not be touching the kickstart when the engine was running - I didn't want the over-running clutch to be running all the time of course. I seem to remember it was all a matter of taking up the slack in the bolt that acted as the pedal stop, in the right direction and timing the nut so the pedal rested against a flat.
One of the most annoying features of the mower was that at idle, the aluminium catcher resonated, rattling against the mower and making a considerable din. It wasn't nearly as bad when the engine was driving the mower: it 2-stroked nicely if running slightly uphill, and when it wasn't uphill I held it back a bit with the handles to achieve the same result. Also, when warm it started very easily with a quick kick of the pedal. The clutch was horrible: it was in or out, I never managed to get it to engage smoothly, and the mower would tip back onto my hands due to inertia whenever I engaged it.
Thank you for posting those pics and information, it is taking me back a lot of years. It was the first mower I ever owned.
