Thanks, Tedster, for your input and encouragement.  Can you recommend what type of diagostic equipment I should have in addition that that I previously mentioned?

I will go back to the car tomorrow when its cooler and see if I can get it to idle smoothly enough to set the timing and idle mixture screws.  Also will check the coil temp to see if the nearly seperated ignition wire may have contributed to my sense that it was too hot.  I am kind of a dunce when it comes to multi-meter operations but will attempt to check the the ohms, volts, and current at the coil.  Fingers crossed!

A defective coil wire will do it. Remember it "works harder", about 8 times harder, than the plug wires in fact. Sounds like you've got a few things going on to keep you busy. Ignition coils themselves get hot, especially considering old school systems have a fixed dwell period. Slower speeds, or idle, should therefore show increased temperatures. How hot is "too hot"? Well they ordinarily dissipate about 70 watts or thereabouts. Check carefully the ohms resistance of the primary circuit, this is the total of the ignition coil primary winding, associated wiring, ignition switch, connections and ballast, if any. It's sort of like Goldilocks and the Three Bears, "too hot" or "too cold" is not what we want. The shop manual lists the specs for the ignition coil and total resistance, current, and voltages. If the primary circuit is getting too much juice for whatever reason, it will cause problems sooner or later.

"Late" or retarded ignition timing will cause the situation you describe with the exhaust manifolds. If ignition timing is way off the beam, they will even start glowing red hot in broad daylight in an astonishingly short period of time. This happens because fuel burning is not confined to the combustion chamber where intended, but is now after burning in the manifold itself.

The good news is you are making progress nailing down the issues. Get the ignition squared away, get the ignition timing squared away, and get the carburetor fuel mix squared away so the plugs aren't fouling out, and it will probably seem like a completely different engine.

More diagnosis yesterday.  I had put in new H 10 plugs about 1000 miles ago and checked #1 when setting up for re-installing the dizzy.  It was very badly blackened with carbon (?) buildup (baked on, beyond cleaning).  I pulled the rest and replaced all with new H10s, properly gapped.  I also found that the coil ignition wire terminal connection had nearly seperated from the wire and it actually broke in my hand as I was inspecting it.  Cleaned it up, installed a new terminal, and reattached it.  I traced out all of the plug wires to verify correct placement to their respective plugs and found #8 to be loose.

Eureka!  said I...  Now it will start and run.  Hit the key, a few pumps of fuel, and it started.  Fiddled with the auto choke linkage a little to set the fast idle and reached up to the turn the dizzy to smooth it out.  In doing so, my left arm brushed against the coil which was quite hot after running only 1 1/2 to 2 minutes.  I have never noticed the temperature of a running coil before and expect that it may get hotter the longer it ran, making it too hot to touch in just a few minutes.  I shut the engine off and then I noticed that the exhaust manifolds were extremely hot, burning to the touch, which seemed excessive for such a short run time.

Tedster, I have already re-inspected the new dizzy cap and have verified spark at each plug.  I had also previously checked spark at the coil as you suggest but following yesterday's discovery of the high temperature, I will hold off on further work until I get more feedback.  Regarding diagnostic equipment, all I can remember from "back in the day" was the large Sun machines.  I have no idea what might be available in today's world for a 6 volt, possitive ground, old Mercury.  Any help there will be greatly appreciated.  I do have a timing light, tach/dwell meter, and a vacuum gauge.

I also wonder if there is a possibility that the timing chain may have jumped.

Just to reiterate, the car was running well, I had just returned home from a 50 mile round trip, climbed a mild grade from the highway to the house in 2nd gear and

lugged it out as I pulled ito the driveway.  It bucked and snorted and quit. 

Acted like it ran out of fuel (which it hadn't).

I would verify timing. A piston-stop tool is like ten bucks.

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I'd agree with that, first pull the coil wire at the distributor cap and then check for quality of spark from coil wire terminal to ground while cranking engine over.

It should be able to jump 1/2" easily, with a fat spark. Only do this test long enough to verify. If this checks out OK, check spark through to each individual plug wire boot & terminal with a spare plug grounded to manifold. Inspect inside of distributor closely with a strong light for evidence of arcing or "carbon tracking", once it starts it is just about impossible to remedy.

Some of that "fancy" test gear mentioned isn't at all expensive these days especially when compared against the value of your time. I bought an ignition oscilloscope complete w/ all the gee-gaws and cables + manuals, for $40, I consider that a steal, it makes short work of troubleshooting and pinpointing any possible ignition problems and it's a whole lot better than guessing, or wonderin', or throwing parts at it!

Start from scratch, pull the coil wire from the dist, cap and check the quality of the spark to ground. Never saw a spark control valve kill the ignition. Basically it retards the timing when the engine is put under a load.

Seems like I am chasing my tail.  It starts but barely runs, engines shakes and exhaust periodically pops on driver side.  Can't get it over a very ragged idle at about 800 - 1000 rpm.  Obviously ignition?

New points properly gapped, new condenser, new rotor, new distributor cap, all of which went into a newly rebuilt distributor with about 300 miles on it.  When changing the cap, I switched one plug wire at a time and I don't think I crossed any.  However, if I did, is there a way to test each indidual plug wire following the firing order from the cap to the respective spark plug?

I have the original wire loom seperators attached to the back of the block (2 on each side) and it is very difficult to follow each wire between the firewall and the block to the open space underneath where they turn forward to the plugs.  Can't shake the wires from the top, can't see the wires between the seperators, can't get my hands back there to feel and follow each wire.  I tried a common circuit tester attempting to get 6 volt power to flow from one end of a wire to the other to no avail.

I don't understand the function of the spark control valve in the carb and maybe it is the culprit (carb is a newly rebuilt 1955 model 4v teapot.  I also wonder if there is a possibility that the timing chain may have jumped.

Just to reiterate, the car was running well, I had just returned home from a 50 mile round trip, climbed a mild grade from the highway to the house in 2nd gear and lugged it out as I pulled ito the driveway.  It bucked and snorted and quit.  Acted like it ran out of fuel (which it hadn't).

Any other suggestions?

Dry Lakes Racer, my initial post referenced a "stock" '54 Mercury which would be 6 volt positive ground.  No 12 volt issues present!

I've been happy with NAPA condenser, so far no problems.

Lanny never responded to Ted’s question on 6 or 12 volts. Burned points in 100 miles sound like 12 with no resister. In my experience the last 1/2” of the point movable arm are would be blue. If 12 volt there are many other items that require changes from the positive ground system. 

56 Vic, B'Ville 200 MPH Club Member, So Cal.