Petter PA2 - 'not starting'

I have a Lister PA2 stationary engine with a Reavell and Co Ltd compressor. When turning with the starting handle the engine is not starting. I believe the fault lies with something previous to the magneto causing the spark to fire late. I have removed the magneto and it spins fine. I want to know what the disc type thing, that I believe is on the timing gear under the magneto, that is moved to and from the gear by moving the mechanism connected to it. At the moment it pulls the shaft that drives the magneto from the gear away from the magneto but doesnt move it back when doing the opposite motion. Should it be doing this? If it is disengaging the shaft could I not end up out by 180 degrees?

Many thanks,
RLittlewood

Lister PA2 is a mistake, it is in fact a Petter PA2. Got mixed up with the Lister CS I was working on at the same time.