The "wire down to the block" leads to the breaker points, which are cleverly hidden behind the flywheel, and are probably causing your "no spark" problem. A little rust on the flywheel or coil will not "kill" the spark, but if there is enough rust so it is bridging the air gap between the flywheel and the coil, even for part of the flywheel's rotation, spark will definitely be affected. I believe the recomended air gap is about .010". After getting the rust brushed off of the flywheel and coil, a common business card used as a feeler gauge to set the coil air gap will get you close enough. (The idea is to have the gap as small as possible, yet have no actual contact between the coil and the flywheel, for the hottest spark.) You probably will have to remove the flywheel, and clean or replace the points, though. As an alternative, the points can be abandoned in place, the wire to them cut, and a Magnetron ignition kit from Briggs installed directly on the coil. Also, Briggs and aftermarket suppliers have coils with the electronic unit built in, eliminating the need for points, also.
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