[GRutter]

It's time to tear into it and figure it out.

The diagram you posted will allow you to Hot Wire your ignition. In order to do that you will need to remove the distributor and the armored cable.

Don't be concerned about the timing... it won't be affected at all. Loosen the jam nut and screw, and lift the distributor out. The tabs on the shafts are offset so you wont get it out of time and won't introduce another unknown.

Start by bypassing the ignition switch as shown on the wiring diagram and try to start it. If it starts with it Hot Wired you've solved the problem. But be aware that with no ignition switch you will need to shut off the gas or choke it out to stop it.

I find it hard to believe that your distributor isn't grounded, but having voltage on the stationary point makes no sense.... But when you pull that distributor out, look at the surfaces and be sure they are clean... also check the screw and jam nut area.