Re: I never met an outboard I didn’t like until now – 1960’s 40Hp Evinrude

[Don]

OK, doesn’t even pop/fart when fuel is primed directly into cylinders, but you say there is hot blue spark. Have you tried the inline neon testers while cranking? Perhaps the engine is sparking while cranking, were the plugs out while you were checking for spark? Perhaps the key switch is funky, or maybe the vacuum switch is out of whack. You might try disconnecting the mag plate leads from the stop/vacuum circuits.
There isn’t much else that could throw the timing out of whack, the engine would surely pop/backfire if the plug leads were reversed. Maybe the carb throttle linkage is disconnected holding the throttle plate closed. I can’t imagine how the exhaust might have suddenly got plugged up either. I suppose it is possible that water is entering the crankcase/cylinders, you could try cranking the engine for a second while the gearcase is out of the water. Are you sure the fuel supply is clean/no water? You might try pumping some fuel out of the tank into a glass jar and letting it sit to see water separating out.
I supposed the engine could somehow be flooding (yes I remember you saying the plugs were dry though). You might try disconnecting the fuel line, draining the carb and letting the engine sit for a few hours, then priming the cylinders and cranking again with no fuel in the carb bowl.
But now that I think of it, perhaps we are overlooking the most obvious problem…Are the spark plugs new? Perhaps they are NG, try another set of plugs!