Achim,
I was thinking about your ignition issues, and I would suggest the reed switch failed due to current limits being exceeded, with a reed being particularly sensitive, as it has little area to dissipate heat from current, and a long "reed", for heat to generate. I use a lot of used parts, salvaged, as I work on a limited budget, but many of the micro switches I run across are rated for constant currents of two amps or more, yet are perhaps five by seven by two millimeters rectangular, and would easily fit in the space you have your points set up. It it'd help, I'd be happy to mail you a couple or three of these switches, if you intend to keep with the remote triggered transistor ignition conversion system. I was thinking while looking at your pictures of your last work, the making of your points system, "if he can swag all that together in a matter of fact way, he just needs to slim them up a bit and he can add a centrifugal advance right behind the points setup. I am a little amazed you just went to machine the parts and fit the home made points shoe-horned into that tiny space in front of the cylinder. With you engine, and all the comments from others who have had similar problems with the hall effect switches, and the general discussion of ignitions, I think I'm going to look into this, and see what can be found, and best suited for this tiny application. Small engines should have small, self contained ignition setups, just like their bigger counterparts.
I really like your attitude of just stopping with a problem and then diving in head first and making something to fix it, and when that turns bad, diving in again without hesitation and trying something tried and true, while you work out another idea. I got used to that attitude while in the Marines, and with yours, I think you'd have made a good Marine. Have you ever considered building a radial sleeve valve engine? Just curious - Mad Jack
