You might have the air gap between the ignition coils and the flywheel off but you say you are getting spark. There is no timing per say that I know of. Only the magnetic poles on the flywheel going past the two coils.
The magnets on the inside of the flywheel charge the stator. Those two operations are really independent of each other as far as I understand.
So it cranks, wants to start you're getting fuel and you get backfires? That sounds like a carburetor issue to me, not the charging system.
If it cranks now I doubt the woodruff key is spent. If it was the flywheel would freewheel.
Last edited by Cadzilla; 02-03-2013 at 08:32 PM.