Ah good ol Murphy! The first thing that springs to mind--well wet, but I'll get back to that--is the grounded plug. I have always had dismal sucess at trying to get the plug to ground. Despite the fact that I never assume when I troubleshoot, spark plugs are the one exception. I assume that plugs are good, and if I have any doubt, I replace with known good plugs.

Discovered by doing stupid stuff, the engine will run on one bank with the other bank disconnected. It runs like major crap, but you can get it to fire.

I bet money that you have a bad cap. As a bail out method, You can douse the inside of the distributor with wd-40 and all over the outside, and-often they'll start. I feel more than confidant to say that if you replace the cap, it will fire because the problem you describe is a textbook example of a bad cap.