Again rotor arms are like gold dust, but using a double output coil the rotor arm is redundant so the only reason I have it fitted is to control the end float on the distributor shaft. From what you have said in previous posts I assume you have an an old distributor cap and rotor arm, so just leave these in place. They will no longer be part of the HT circuit as the HT will go direct from the coil to the spark plugs, rather down the king lead, then through the distributor cap and rotor arm, then back through the distributor cap and out to the relevant spark plug. As for what you can see under the distributor, no sadly that's just a bit of rag to soak up any oil leakage, which is only very slight. By the way attached is a picture of my Dragonfly which I have owned for the past 43 years. Not 100% original, but is used for riding not for display.