Yes , the timing light can be hooked on a single cylinder engine
Yes, the timing advances with widening the gap, also the dwell time from the coil is important...
( time that the current flow's in the coil, releasing its load when the contacts break )
Yes the gas needs a forcefull spark, but less with waterdrip
There is less or no need for advancing timing when running with waterdrip, even retarding might be possible...
Test your genny with gasoline first , load measurement untill a certain rpm drop, then repeat again on gas... ( certain rpm drop would be 2-3% on the Hz or whatever value is indicated on your set, between 58 and 62 Hz ? )
I did get 1800 real watts on a chinese 2500 watts , on gasoline, chinese rating on 50 Hz factor 1.0
and 1350 watts on gas... ( and i have not tweaked the set yet ) at 3000 Rpm,
i am sure i can get more out of it at higher Rpm up to 60 Hz at 3600 Rpm
The waterdrip play's a big part in getting at the power peak, but i am trying to get max at only gas... ( how to teach someone to convert water into energy ?)