Small Engine Troubleshooting Problems? Ask a Mechanic Now.
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I am assuming that the wire you are referring to is the small ground wire. It that is correct then you have a problem backwards with the wiring that is grounding the coil when it is plugged up to the coil. I would start tracing that wire backwards to see if you can find any bare spots or a safety that it runs back through that might keep the ignition grounded and not let if fire.