Another update, still no luck.
I removed the anti-reverse spring completely.
I double checked the resistance of the sensors, still 4.8-4.9 OHM. I checked each wire to ground and found no issues.
I added in the extra wire with diode running from the starter terminal to the 12V going to the powerpack.
If I line up the distributor to cylinder #1 and tap the wires together I get a nice hot spark that jumps a 1/2" gap.
But when I crank I still get nothing. I tried it with a 0.028" gap, 0.0.20" gap and 0.015" gap. I don't get any kind kind of voltage reading with a DVA adaptor connected between to the two sensor wires. And I don't get any sparks when cranking.
I measure about 10V at the 12V powerpack wire when cranking.
I've done every test in the manual and it still doesn't work. I even tried a spare flywheel thinking the flywheel magnets might be going bad, still no luck.
I'm not even sure I can convert it to points, as I don't see the bumps on the crankshaft like the 85hp engine has to open the points.
Any other suggestions or longshots? I've run out of ideas, and I'm afraid the next step is selling this off as a project and getting out of boats for a while.