In the past my posts have received encouraging supportive remarks, it does appear that I may have reached for the caterpillar hammer instead of the Kirby. It seems there is good reason to send the Kirby Tecumsehs off to the scrap metal dealer. I suspect in there day they were a great reliable little motor. How else could they survived when you need to take the head off to check the points. It would seem they are suffering from a metal fatigue in the 21st century as there are a few other posts with unexpected breakage.
In any case it inspired me to see if I could make it go and at least my early diagnosis was proven correct in that it was seriously out of time. Probably firing about 20 degrees after TDC. If you loosen the ignition mounting plate too much it can slide off from the collar on the engine block giving you an incorrect reading when trying to set the timing. A simple matter of testing it again when tightened would have saved my predecessor a lot of grief and the motor would have ran.
I drilled out the centre of the crankshaft and tapped it with a 5/16" UNC. It was much easier then I expected. I had always thought crankshafts would be very hard steel. I vaguely recollect being told that they had a process to just harden the journals and leave the rest as mild steel.
Reset the timing (never would have had a chance of timing it without a post telling you how) and tested the spark at the lead using a drill to turn the motor over. It looked great. Reassembled it no spark. Pulled the flywheel off and I must have failed to clean all of the metal shavings out as the seal was leaking and flooded the points with oil. $3.00 for a new seal retimed it . It runs roughly just needs an air cleaner and a fuel tank so I can adjust the carburettor.
I would not recommend this process to any one, I just got the satisfaction of seeing it run after someone else had given up on it. At the end of the day it is still an old motor which is likely to let you down.
Thanks to everyone especially Mr Bonnar for their previous posts which gave me the smarts to make it work.