I'm guessing you were trying to rev it up at the end of this video? 

Sounds definitely like ignition to me.  Check out HT1kid's suggestion and inspect the insulation on the wiring under the stator carefully.  You might have in intermittent short.  Seems like an unusual way to route the wire.

The old key was laying in the bottom of the outer magneto case. 

A thirteen cent one from local hardware "fits " but no marked improvement. So out it goes til the oem one shows up.

I have a lot of learning to do on how to set points.  I do not have a dial Gauge or the like.. 

It probably was a weird way to do it. I did it. Lol  maybe needs to be redone?

Maybe not.  But remember that there's a big spinny thing that might try to rub a hole in the insulation.

Carefully check all the wires for insulation breaks.  That blue one looks like there might be some carbon tracking so likely insulation is damaged.

Key was lying at the bottom of the magneto base? Perhaps on its launch... something got hosed up?
Sneezles61

My thought only--forget timing, hell modern bikes have a button to move timing all over the show depending on what performance is required. But anyway, key was in the bottom of the case you say, that's interesting as can't fall out. A 13 cent key will still work if it fits & nothing special with original keys. I have made my own when i've have to. Made one for my lawnmower--hit a rock & crank key went--made it out of the curved corner of an old head steady or engine plate, alloy one in my case. Taper does the holding but has to be "Tight". Can worry about timing if you want but i'd go looking for the main problem, isolate that rubbed through wire first & blow the air gun around in there incase minute slivers of metal are bridging things & have had a sliver shorting the points wire mount to earth once on a bike at work, like about a short piece of wire brush strand it was. Set points full to 14 full open which i think is about the end of the flywheel slot as it then covers getting at the points if you turn it any more. Could do it the other way & line up the pointer tab with the flywheel notch & set them so "Just moving" at that point. Sorry if i'm opposing other suggestions but just what i'd do, that's all. Another thought, is the lighting charging coils ok as i 'think' the source coil finds its earth via one of those. Has you replacement key let go too, hope not. Tight nut is the 'go'.

Close up pic of the blue one i can see the copper wire where its rubbed through so an arcing point if touching the flywheel--or was touching once. Now me cuppa tea's gone cold.

Perhaps someone has a picture of how those stator wires SHOULD go?  I see the nick now.   I know something about getting kids to behave and do their work,  and a lot less about motorcycle wrenching....

If you found that key in the bottom of the case, it had to fall out when working on it.  Just put it back in.  Unless there's something wrong with it we can't see.

Wire really needs to go out the back with the other condenser wires then come back through to the point--if poss. Otherwise--for now--just tuck it under the coil out of the way so the points cam doesn't rub, rather than go to great trouble replacing the wire with longer one to reach but then find you're still chasing the misfiring problem.