From the sounds of things, the bike should be able to run with those parts, but it won't run well with those settings.
The condensors are only there to prevent sparks at the points when they open, due to EMF backlash. They are just big capacitors that soak up the surge, testing them on the bench can be tricky.
The points likely need to be cleaned. I'm pretty sure I can see evidence of this in your pics. Cleaning them may (will) alter the gap, so check them and reset them afterwards.
Then do your timing.
mystic_1