Motorcycle Repair: No spark at the points!, plastic washers, metal screws

Question
Hey Rich, I just finished doing a top end gasket job on my 75 CB550K1.  When I had everything back on and ready to start up I noticed when turning the engine over with the electric start that there was no arcing between the points when they were opening up on either the 1.4 and 2.3 points.  Any idea what would have caused this?  When we first tried to start it, my buddy used a power drill to loosen the 3 screws on the points plate to advance the timing and he said that he thought he saw a spark jump from the points plate screw to the drill.  I'm guessing this could be the problem since there was no spark after that happened.

Answer
First make sure the kill switch isn't on. I can't tell you how often I've accidently bumped the kill switch and wasted time trying to figure out what's wrong.  

Assuming you have power at the coils, I'm guessing the terminals are being grounded at the points.  If you look close at where the blue and yellow wires attach to the points, I think you'll find that the terminal are touching either the point backing plate or the points themselves.  The points have fiber or plastic washers that are supposed to isolate the terminals from the points.  The terminal should only be contacting the metal screws on the points and not the main body of the points.  

The spark you saw was probably a discharge from the coils as the coil plate was removed from the case or it could have been the capacitors discharging to ground.  The blue and yellow wires only ground the coils. The ground is interrupted when the points open and the coil discharges to the spark plug.  Once contact is made to ground when the points close the coils are charged and ready to fire again.  

Let me know if that helps. If not, we can back track the problem.  It won't be too difficult to trace down.