Re: 65' Merc 500 no spark
I have a '61 Merc 500 and if yours is similar to mine you should have a distributor setup with a single coil/magneto and the spark gets distributed via the cap. I'd take the cap off and see how the distributor looks under there, maybe they're corroded/worn down or something of the sort. Also make sure that the plug wires are in decent shape and not grounding out on the block...
-Torsten