Beyond Frustrated - Wont start/stay running

The condenser case absolutely has to be grounded.

As hi-schoolers we used to charge those condensers up, and then you could carry them by the case. To discharge them we would just bend the short wire over towards the case and then ZZZZap, she would unload. Well, if you got someone's bodypart in-between there, well that came as a shock to them. Just don't do it in shop class, cuz the teacher was no dummy,lol.And he had a low tolerance for shenanigans.
If the points are that new, and the condenser was operating correctly, then they should be fine.
Sanding them is kindof an art, and takes great patience. It is impossible to do,with the points still mounted in the D, as installed on a slanty. It's hard enough on a SBM ,leaning over the fender. So I just take them out and over to the vise. Here I first make sure the contacts faces are parallel. Then,I use a fairly coarse emery paper, folded over on itself at least once , and making a narrow strip about 6 inches long and maybe 5/16 wide.Then I draw the sandpaper thru both contacts at the same time, keeping the points closed with the other hand, but just loose enough that the paper can do it's job. It only takes a few strokes to get the surfaces flat and shiny. Then I follow that with a 220 paper.Now comes the important part; you have to be sure that no emery particles end up stuck between the contacts, and then they have to be cleaned of oil. I use a blast of contact cleaner and shop air. After this, anything you put between those contacts has to be oil-free. ie, clean your feeler gauges.
And finally is the rubbing block. The older the points, the more worn off the rubbing block can get, especially if it was running dry. Eventually it can get so short that the gap can no longer be set to spec.
Then there is the no-small-matter of setting the gap. If the D has a lot of slop in the top bushing, setting the gap to spec can be a frustrating experience. This is why there is a dwell spec with a variance. But be of good cheer, the gap is a lot less critical then some would have you believe. There are three requirements that have to be met;1) the points have to snap open and snap shut. Open is most important.2) the coil needs time to charge up, so the longer the points are closed the better, that needs a small gap and 3) you don't want to be doing this every 1000 miles so that needs a wider gap, in case the rubbing block wears too fast. So the factory gives you a gap-spec, that they have determined will hit the targets. And a dwell-meter is a better tool than a feeler gauge on account of the dwell-meter works on a running engine, so you don't have to try and compensate for the top bushing wear.

Now, you can buy a point file, but I threw mine away years ago. Firstly they are fat. FAT! The contact faces end up not parallel when closed. And secondly, they are soft, and go dull very quickly. And thirdly, they are easily lost.
So for me, it's emery paper. Jut one sheet will last you a lifetime, it starts out as 8 x 11 which is hard to lose plus every shop has some, and even folded over it is pretty thin.
And BTW, emery paper is best. The grit size is more consistant and the grits stay on the paper, and the backing is thin and flexible enough that you can draw it thru the contacts in a sort of arc, without breaking/tearing it.
Those contacts are very hard.Garnet paper will cut them, with more strokes, but the garnet particles are not glued onto the backing very well. They come off and make a mess, and you have to be extra careful to get them all gone. If circumstances dictate using it, for sure take the points out of the D! You don't want those particles floating around in there.