This is the procedure for setting ignition timing on old Tecumseh's with points under the flywheel. Tools required.
1. Ohm meter or some sort of test light for checking continuity.
2. .020" feeler gauge.
3.
--A. Dial indicator with proper offset adaptor, or
--B. A fine ruled measure stick and straight edge.
4. Misc. hand tools.
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1. If using the proper dial indicator, remove the spark plug. If using a measure stick and straight edge, remove the head and clean the block surface.

2. Clean points or install new points (new points should be cleaned as well). Find the high point of the lobe which activates the point arm. Some will have a small arrow (not to be confused with some lobes having a set of lines). Rotate the crank until the high point is at the point arm and set point gap to .020".

3.
--A. Rotate crank until piston is at TDC with both valves closed. If using a dial indicator, from flywheel side, rotate crank counter clockwise 1/8 turn. Install dial indicator. Adjust indicator so the probe is into the bore. Slowly rotate crank clockwise until piston contacts indicator probe. Continue rotating clockwise until dial stops turning (you're back to TDC). Zero the dial. Then rotate crank clounter clockwise until the piston is at your engines BTDC plus .010". Example. If you're engines BTDC timing is .090", go to .100". Then very slowly turn the engine clockwise until at your engines BTDC figure. In this example, .090".
--B. Measure stick and straight edge. Basically the same principle here except you'll be laying the straight edge across the cylinder bore and using the measure stick to find your engines BTDC timing point.

4. OK. Make sure the crank position is not moved. Loosen the stator plate so it can be rotated back and forth, not sloppy loose but enough you can move it freely. If not already, disconnect condensor and kill wires from the point terminal. Connect ohm meter or continuity tester, one lead to the point terminal, one to engine block. Rotate the stator plate clockwise until the continuity tester or ohm meter shows continuity, points closed. Then rotate stator plate counter clockwise very slowly until continuity is broken, points just cracked open. If all has been done right, you can now tighten the stator plate and reassemble engine.

If the point activation lobe has a set of lines, spaced about the distance that equals the width of the point arm that contacts it, the lines and point arm should center. If not, you want to find where you went wrong. Often as not, error is made in the point gap itself. If all else seems to be correct with the actual stator timing, reset the point gap using the lobe lines and point arm centering them as the moment the points crack open on the continuity tester.