It helps if you have the right diagnostic tools and know how to use them correctly . . . but if you don't, an old VW is what you need. Someday I'm going to buy a dwell meter (if they even make them anymore) and a good timing light, but until then, I'll stick with my "McGuiver" methods. Keep in mind, this isn't a standard automotive diagnostic proceedure, but here's what I'd do . . .
Your engine needs three things to run . . . compression, fuel/air mixture, and a properly timed spark. So first you have to figure out which one you don't have.
Compression probably isn't the problem . . . I've never seen a VW engine with the compression so low it wouldn't at least try to start unless it has had a major mechanical malfunction.
Take off the breather, hold the choke open and look down into the carb . . . Now open up the throttle . . . if you see the accelerator pump spray fuel into the throat of the carb, it's probably not a fuel related problem . . . so you're down to the spark.
Pop the distributor cap off . . . turn the engine by hand until the points are closed good and tight . . . put the cap back on. Now, turn the switch on, pull the coil wire out of the cap and hold it close to something metal. Now, pull the wire from the coil to the points off of the coil and tap it against the post it plugs on to. If there is power to the coil and the distributor is grounded, you should get a spark every time you remove the ground wire from the coil.
If you don't get a spark that way, try the same thing but use a jumper wire from something grounded to points side of the coil.
If you get a spark now, you've either got points that are burnt and, even though they are making contact, they are not letting the current throught the coil got to ground, OR the distributor isn't grounded good. That last one isn't a common problem, but I have seen it happen when the distributor clamp is loose.
If you still don't have a spark, you either have a bad coil, or no power to it . . . or there is something else hooked to the distributor side of the coil grounding it out . . . you probably should check that first. (If you've had everything unhooked, it's really common to hook the backup lights to the wrong side of the coil. If you ever have an engine die everytime you put it in reverse, that's the problem. Don't ask me how I know that! :p )
You should have the power from the idle cut off solinoid and choke heater element jumping off of the + side of the coil. When you disconnect the wire to the idle cut off you should here it click . . . if you do, you have power to the coil. If you don't you either don't have power or you have a bad idle cut off solinoid. VERY VERY quickly tap the coil power wire against the fan shroud . . . if it doesn't spark, you've got a power problem, if it does, you have a bad coil.
Once you get a spark, you have to get it at least close to the right time. Turn the engine over by hand till you have the Top Dead Center mark lined up with the split in the case. The rotor will be pointing to either #1 or #3 . . . if the distributor drive shaft was intalled wrong (very common for first time engine builders), it might not be pointing towards where #1 or #3 "should" be, but trust me, it's pointing at either #1 or #3. Assume it's #1. Put the cap back on, and hook the #1 plug wire to the post nearest where the rotor button was pointed. Going counter-clockwise from there, hook #2 to the next post, #3 to the next, #4 to the next. (The distributor actually turns clockwise and the firing order is 1-4-3-2 . . . works out the same either way . . . 1-2-3-4 is just easier for me to comprehend :cool: )
Now back turn on the switch, pull the coil wire from the distributor cap and hold it near a good ground . . . slowly turn the engine by hand . . . it should fire at very near top dead center and bottom dead center . . . if it's not right about top and bottom dead center when it fires, loosen the clamp and rotate the distributor until it is. Now try to start it. If it backfires, pops, cracks, etc., move the wires two spots around the distributor cap. Now it should run . . . you really need a timing light to get it right, but that should get you running.
:cool: