The base setting for the point gap is 15 thousandths. Set the left cylinder to .015 and check the timing with a timing light. Adjust the timing for the left side by moving the base plate up or down. Now change the timing light to the right cylinder and check the timing for the left cylinder. Adjust the timing for the left side by changing the points gap if the left base plate can not be adjusted, ( I can't remember if the left plate adjusts or not ). The wires should not be grounded. Check to see if the timing advances as it should when the revs increase. Below is a photo from an 1979 RD400 owners manual. Yours looks the same.
Go to the site below where you can see a parts diagram for your specific bike. You will select the actual brand, year, model, etc., once you go to the site. Part numbers and prices are also shown. You can order parts from this site. In the event no price is shown on a particular part and/or the notation "Not Available" is in the description, the part is not in stock. It looks like they have points for a 1975 RD350 and they should work on your bike. www.babbittsonline.com/pages/parts/viewbybrandand/parts.aspx
Yamaha can tell from the VIN what exact year and model your bike is. Check with them as I don't think the 350 was made in 1979.
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