I have a good running example of one of these motors sitting in the garage and I can always pop the cover off to compare it to yours. I might see something you've missed. It doesn't have points in it though as it came with a Nova II module already installed.
I'd be more concerned about the condition of the ignition components than the exhaust.
The points should be removed and cleaned of any dirt or scale and polished until they are shiny. The electrical connections look corroded to and the condenser has probably seen better days. This mag might fire a plug without a load on it but once the plug is reinstalled and under compression, it may not have enough oomph to do the job.
You want them smooth and shiny with no scratches on them for best results. Using progressively finer grits of wet n dry paper will give good results. Usually I start with 4-600 depending on the condition and finish up with 1500 but 800 will give good results to. A used piece of paper with the sharp tooth on it worn down works good to.
John8504 wrote:Where might I find a new condenser?
That's a Phelon mag with cap P/N PG or FG-7270? I'd try a Google search first or place a want ad in the Free Classified section here or if you can find the uF rating for it, replace it with a Vishay cap with the same or close uF rating.
Quality replacement Vishay capacitors can be found here at Digi-Key with ratings of 0.10, 0.15, and 0.22 uF to cover most outboard magnetos. Click in the upper right to change your country/location.