Assuming its an ignition problem and not a fuel problem, there are a couple things to check. First, are you using a 12volt coil or a six volt coil with a ballast resistor? If you have a 12 volt battery running a six volt coil with no ballast resistor, you'll have twice as much current going through the points and they'll burn up in short order. I'm not sure how much current magneto points are intended to carry, but I suspect its a lot less than a set of distributor points.
Check the points, make sure they're not burned and are gapped correctly. The idea of checking to see if you have spark immediately after it dies is a good thing to do, it'll tell you if the engine died because of a heat related spark problem or if there's something else wrong. Also check to make sure that there isn't a broken or loose wire somewhere in the ignition circuit. I'd carefully check the wire going from the coil to the points, particularly where it goes through the magneto shell.
The fact that you have fuel to the carburetor doesn't mean you don't have some other problem in the carburetor, either. Could be something as simple as a piece of crud in the main jet. If everything seems good ignition wise, and you still have spark when it dies, the next thing I would try is a carburetor overhaul.
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