Why did you replace the points with magnatron?
points work just as good, I have multiple engines that have points style ignition systems, chain saws, boat motors, transfer pumps, tractors, tillers vintage cars & trucks etc. etc.
all work just fine without electronic ingnition, just saying.
Since you have the head off, and saying the valves are opening and closing as the piston is moving up/down, you pretty much have to have compression unless the piston has a big hole in it.
A pulse jet carb is no different than any other carb, hell you can take a carb off and set it on the work bench and the engine will run as long as you squirt a bit of fuel in the intake port with a squirt bottle.
A quick way to check compression (with the head on of course) is put your finger or thumb in the spark plug hole and pull the rope starter, if it blows your finger/thumb away and sucks it slightly on intake stroke, you have compression.
You are missing something,or you are not telling us enough information to help further.
