The by-pass circuit runs from the solenoid "I" terminal to coil positive. When the solenoid is closed as is the case when the starter is engaged, battery + is internally jumpered inside the solenoid to the "I" terminal, this is what feeds the ignition coil during cranking. This is the way it is usually done prior to TFI ignition. The by-pass can also be done via the ignition switch. Go with what the wiring diagram indicates. Either way, you should be able to measure cranking battery volts at the coil positive when cranking the engine.
Another point to check is the ground inside the distributor, of the three wires running to the distributor, one is the ground for the ignition box, it is literally an eyelet screwed to the distributor housing (inside), but it depends on a clean ground all the way thru the housing AND where the distributor contacts the engine block, any corrosion between the distributor housing and the engine block will cause problems also.