No spark and a probable cause?

[Stand-in]

So I have now rebuilt my engine, and all I have is a glorified air pump. I have many electrical issues but at the least I would like to get it running(high beam and low beams do not come on, but the pull back works for high beams. When I adjusted the dimmer for the low beams to the max I would pop a fuse and the right front running light would come on, now nothing happens).

Anyways that's for after I get it running; I have power to the spark coil and it along with the spark distributor cap and arm, new spark cables, plugs and yet no spark. Anyways when I was about to take the distributor out for a look over I noticed this. I presume its not normal, I have read 12.4v so its a direct connection to the battery, when sparking it the pump turns on for the fuel, as expected, but this cant be normal. Also the voltage drops to 0.01 as soon as its connected. (tested from the internal terminal that runs to the spark breaker, and then to ground)
What a doozie this one is, I will be buying new relays and perhaps hiring an electrician in the near future.

[Stand-in]

More info, I swapped the terminal with the one to the oil switch, it got rid of the oil switch hazard light, but as to get the other terminal to the spark distributor I had to reroute the cable, now the hazard light doesn't care about having power to the switch, bummer. Anyways I still have no spark, and the last info is that when the distributor cap is on the coil starts getting warm, like hot warm. I also found that the gasket around my water pump needs replacing, how fun, thanks Kronos. I will deal with that once the motor works.

[Stand-in]

Ok here's another tid bit, there is continuity between the points even when separated.... Thoughts?

[Stand-in]

Ok based on this video,

I can only presume that the spark condenser refuses to take voltage, and is instead just dumping to ground, acting as a wire rather than a capacitor. This and the points may be set incorrectly... I don't believe the wires are frayed but I will check again.

[Jeroen]

Capacitor sounds like the nr 1 suspect indeed. Keep us posted!

[Stand-in]

Found it!
Turns out that one of the screws for the retention arms on the cap was making contact with my pin arm and shorting the system! It was hidden by the wire next to it so its no wonder I had not found it sooner.

[Jeroen]

Easy fixes are the best!