The ceramic thing is a "ignition ballast resistor", which drops the 12-Volt battery voltage to 6 to 8 Volts for the coil. If there is a wiring short between the resistor and the coil, a short in the coil itself, or a short between the coil and the points OR the points are shorted, or simply closed, the reistor will begin to heat up in short order with the ignition "ON". The heating, in itself, is normal. And, there must NOT be a blown fuse, or there would be no current, and no heating of the resistor. The first thing to do is rotate the engine to a point where the breaker points are open. Then, there should be no primary current, and the resistor should not heat up. If it heats up with the points open, we need to figure out where the short is! And, I suspect the "ancient-looking" coil may be an OEM IH coil that is of different construction than the typical "round-can" coils you are used to seeing. If so, the primary terminals will be at one end, with the high-tension "tower" at the other end.
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