Hi Finbar, there are a couple of things that need to be completely clear before taking the next step in this diagnosis. You will be aware that your ignition system has a "kill switch", which in very early designs consisted of a metal bit that pivoted forward and shorted the top contact of the spark plug to ground. On later machines it shorted the low tension instead of the high tension - on breaker point machines by grounding the non-grounded side of the breaker points, and on Magnatec machines by grounding the floating side of the switching transistor. You need to be completely sure that you had isolated the kill switch when you tested for spark. This usually requires disconnecting the kill wire at its source, not at the point where it is switched to ground by the kill switch, because it is not unusual for the black kill wire to have worn through its insulation and become grounded somewhere en route to the switch. So, please be very sure the kill wire was isolated when you tested for spark.
You also need to be sure that the coil is properly grounded and is the correct distance from the flywheel, and that the wire from the coil to the breaker points is not grounded. Check that the high tension lead from the coil to the spark plug is also undamaged - I once clamped the cooling air cowl in such a way as to pinch the HT lead, which resulted in no spark after an hour or two of use. Check that the flywheel magnet is in place and is still magnetised.
Next you need to check that the breaker points are making good (low resistance) contact when they are closed. Verify that the contact surfaces are clean, not blackened, and are making full-area contact with each other. Check that the non-grounded breaker point and its attached wire are not grounded or leaking to ground.
Once you are sure about those points, there should only be two remaining causes for no spark: either the capacitor (condenser) has failed, or the coil has. Capacitors are much more prone to failing than coils, and are much cheaper to replace, so at this point you should try another capacitor and see if that overcomes your problem. If it does not, you will need to try another coil.
Note that after a lot of wear, the plastic plunger that runs through the wall of the crankcase and operates the points may leak oil into the points compartment, which keeps the ignition from working. If there is oil leakage into the points compartment, replace the plunger and see if that fixes the problem. If it does not, the only cures are reaming out the hole the plunger runs through and bushing it, or switching to Magnetron ignition. You would need to have a special reason for rebushing, since fitting a Magnetron is a great deal easier and tends to produce a better ignition system.
Incidentally I have not found a way to test an ignition capacitor with a multimeter that means anything much. The capacitor experiences a peak voltage of about 150 Volts in service, so you'd need a megger rather than a multimeter. Even then, because of the very rapid voltage transitions that occur in a running engine, the test would be inadequate.
