Sorry to hear of your issues, Ill try to address your points with what I have learned.
1) Regardless of timing there should be some spark?[/i] Yes as long as the ignition is working it will produce a spark even if it's 180 degrees out.
2) What does the BTDC in the instruction really mean? ( before top dead centre ) I'm not familiar with the specific instruction you speak of, but since these have an auto advance (maybe initial retard would be more accurate), logic should dictate that the initial stator plate timing should be set according to the instructions, i.e 2.2 degrees BTDC, and the ignition is retarded until the engine is spinning over 350 rpm(?) from memory, then it kicks in to the correct advance.
3) Do I need to run a separate earth? If so were from? I don't think it's a requirement, but good practice all the same, all earths should be checked as well, but I'm sure you are aware of this. Try an earth from one of the stator plate mounting screws up to one of the coil/cdi mounting screws, old SEM/Motoplat trick!
4) I only have 1m between the flywheel and the stator plate, in the instruction photo’s it looks more like 6mm , am I now to close to the magnets? Can't say without any experience with outer rotor Electrex ignitions, they do come in two or more different tapers to suit different models, can you check to see if your taper on the crank end is the correct one? Can you get a visual on how the magnets in the rotor would relate to the windings of the stator? Directly in line would be preferable, but a couple of mm either way shouldn't be an issue providing there is no rotor to stator contact. You would think that even with 6mm difference that you would still get a spark even if reduced?
Not sure if any of this is helpful, just some observations/logic I have learned the hard way over the years.
