What you have done is to locate the crank and camshaft to be in the position where the spark will occur and the engine will run at idle. The spark timing lever should be in the up ( retard) position. Now the points should just be at the point where the points are at the place where even the slightest movement will break (open). The point gap would be the widest point opening so it must be set before any of the above is done. The rubbing block on the moveable point would be sitting on the highest part of the dist. cam. So, set gap,locate crank, retard spark lever, With loose screw - locate the rotor where it just has reached the #1 lug, then tighten the screw. now with the ignition on wiggle the rotor CW. CCW. and there should be spark at that moment.