The type spark tester that you picture using doesn't really tell the tale. You need to use a open air gap spark tester whereas you can actually set a gap of 7/16" for the spark to jump across. The spark should be a strong blue lightning like flame... a real SNAP!
The spark plugs must be removed in order to obtain the highest cranking rpm. The engine must crank over at least 300 rpm in order for the stator under the flywheel to energize the powerpack.
If the engine cranks over fast, as requirements stated above, but the spark still remains faulty... check the extreme forward and extreme rear portion of the stator. On that model, those two areas would contain the large coils that provide approximately 300ac volts to the powerpack capcitor. Should either of those areas be cracked and/or leaking/oozing a sticky looking substance down on the timer base and powerhead area... replace the stator.
Let us know what you find. No open air gap spark tester?... build the following.
(Spark Tester - Home Made)
(J. Reeves)
You can use a medium size philips screwdriver (#2 I believe) inserted into the spark plug boot spring connector, then hold the screwdriver shank approximately 7/16" away from the block to check the spark or build the following:
A spark tester can be made with a piece of 1x4 or 1x6, drive a few finishing nails through it, then bend the pointed ends at a right angle. You can then adjust the gap by simply twisting the nail(s). Solder a spark plug wire to one which you can connect to the spark plug boots, and a ground wire of some kind to the other to connect to the powerhead somewhere. Use small alligator clips on the other end of the wires to connect to ground and to the spark plug connector that exists inside of the rubber plug boot.
Using the above, one could easily build a spark tester whereas they could connect 2, 4, 6, or 8 cylinders all at one time. The ground nail being straight up, the others being bent, aimed at the ground nail. A typical 4 cylinder tester follows:
..........X1..........X2
.................X..(grd)
..........X3..........X4