QUOTE(John @ Oct 20 2011, 10:33 PM)
#1 is the breaker plate ground wire.
#2 is a holder for a ball bearing (as I recall) The ball bearing is supposed to allow the breaker plate to rotate from the vacuum advance can.
That is correct. Given the condition up top, the mechanical advance unit below the breaker plate is probably as bad or worse. I wouldn't be surprised if you are not getting any advance - vacuum or mechanical. Try twisting the rotor, it should move perhaps a half inch as measured at the end, then spring back. If it springs back, the advance system is not bound up.
I'd take the breaker plate out, clean it up, examine the mechanical advance system, if rusty hit it with penetrating oil like Tri-Flow, work it free, put everything back together, then don't forget to put a few drops of oil on the felt in the center of the shaft - keeps the advance mechanism lubricated.
Check your timing after all this.
Went through all this a few months. Not much work, made a big difference.