Will, are you using a voltmeter or a light bulb to set the timing? If you are and you see the correct voltage across the points when they are open, everything is good all the way to the coil as far as power goes. You should not see an arc. The purpose of the condenser is to prevent the arc when the points open. Going to the basics here, when the points close the coil is energized. As soon as the points open the charged coil discharges through the center electrode to the distributor cap. From there through the rotor to the plug. So if you have the correct voltage across the points when they are open, you can eliminate a lot of things.