Your problem as well as the story that follows is the exact same as mine, and as yet to be solved.
I noticed the same component in mine (The one circled in red) to be faulty as well. It's called a fusible link, and it looks like a peice of wire with two blade connectors at the end you're gonna need to get what's called "Fusible Link Wire" (Don't, Don't, Don't use regular wire!!) in 14awg as well as two of the crimp on terminals to fix this. Just cut about 2.5 inches of this stuff and attach the two connectors to either end. This however did not help my starting either.
In my case, the wire was all frayed and the insulation melted.
What I normally do to check for fuel is simple: crank the engine, turn it off unscrew any of the plugs and sniff the end of the plug or the hole. The smell or lack thereof will give you the answer you need.
I too had eventually lost spark, and am replacing the pickup coil in the distributor. My plugs, wires, cap, rotor, IC, injectors, pump and coil are all new. Was the shaft for your rotor rusty..?