I've never read that you need to remove the blue wire to check static timing. What book says that?
Just connect your timing light to ground with one lead and on the small screw where the points wires are connected. Just be sure that lead doesn't ground to the points plate or anything.
Turn the key to 'on' and the kill switch to 'run' then slowly spin the motor in the correct direction using the kick starter, large bolt on the rotor on the left side or
carefully use that nut in the picture...it's like a 23mm or something.
The light should come on right when the F mark hits witness mark. If it doesn't, loosen the plate slightly and adjust until it does. It tends to move after you tighten everything down so verify a few times.
If the brightness we see in the picture is from your test light then you seem too advanced. And that makes sense as to how the points plate is clocked. Moving the plate CW retards the timing and should get you closer.
(Someone correct me if I'm wrong about CCW is advance and CW is retard, hard to visualize in the morning
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