Yeh much better without the spark waking away, I still do not like the hollowness I hear, and yes the problem does not have to be one thing. Maybe bottom end and valve train together. I hear a typical TR3 valve train and==== yes a little== to a lot=== too loose. Have you slid one of the rockers over and felt the bottom of the rocker shaft. you have too loosen up the adjuster with the piston up..
TR3s chew those shafts up for some reason, but perhaps it is the originals that I have taken out over the years, but what I am saying is the shafts can get very worn deeply and the motor runs fine=== but makes noises and it cannot be fixed without replacing the shaft and usually re-bushing (which I do not recommend) or replacing the rockers. I would seriously think about doing that because it has to be done anyway, does not cost that much and the motor and stuff stays in the car and the access is easy. Wish I was there I would feel more confident about my diagnoses.
Bottom line is you are a TR3 guy now, so now=== you have to fix it, and yes===== I did see a Rabbit run through here.
Steve