I suggest you connect one side of your unpowered test light to chassis ground and the other to the low-tension terminal on the distributor, rotate the engine so the points "open", then turn one the ignition switch and observe the light.
Light "ON" = OK, then need to verify that light goes out when points close.
Light "OFF" = short at points or distributor feed-though, or possibly no power getting to switch side of coil or a bad coil.
You can view the parts breakdown, showing Key # 19, the insulating "bushing" that insulates the terminal stud at the outside, and through the distributor body, and Key # 18, which insulates the stud from the distributor body at the inside.
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Today's Featured Article - An Old-Time Tractor Demonstration - by Kim Pratt. Sam was born in rural Kansas in 1926. His dad was a hard-working farmer and the children worked hard everyday to help ends meet. In the rural area he grew up in, the highlight of the week was Saturday when many people took a break from their work to go to town. It was on one such Saturday in the early 1940's when Sam was 16 years old that he ended up in Dennison, Kansas to watch a demonstration of a new tractor being put on by a local dealer. It was an Allis-Chalmers tractor dealership,
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