Fuel dripping out of the carb after you choke it is pretty normal. I would not run the tractor with the air cleaner disconnected. There is a weep hole in the bottom of the carb to let the excess fuel out. Take MagMan's advice to heart. Don't over think this. Farmer Bob told you the layout of the valves. When both valves on #1 are closed and the pointer is lined up with the first double notch, The #1 cylinder is ready to fire. The points need to open to create the spark and the rotor has to send it to the right plug wire to get it to #1 cylinder. The motor does not care where the distributor rotor is pointing as long as it is in time with the cylinder that is ready to fire. The 2 'o' clock position mostly has to do with the number "1" molded into the original distributor cap. In any case, you will need to get the motor, the points and the rotor all in time to get it to run. Back to MagMan's point - just do the minimum to get it running. It sounds like you need to fine tune the timing to get it to start. Get #1 to TDC on compression and follow the instructions in paragraph 179 of your IT manual- Loosen the distributor clamps and turn the distributor body clockwise about 1/6 of a turn. Hold the distributor end of the coil wire 1/8" away from the metal distributor body. Turn on the ignition and slowly turn the distributor body CCW. When you see a spark, stop and tighten the distributor clamps. Shut the ignition off. Make sure your plug wires are in the right order. Give it two cranks of full choke. Open the choke, advance the throttle about a half a dozen clicks, turn on the ignition, and it should start.
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