Fired on the wasted spark. I had one JD that did once in the shop. I nearly wet myself as I my 12 gauge or .357 was fired off right behind me.
Hmmm. When you bypassed the coils how did you do that? If you applied 12 volts to the kill terminals it would have destroyed them. If you just grounded that fine as that is the normal method of killing their output. Also when you bypassed the fuel solenoid on the carburetor, how did you do that one too?
Also have you tested the fuel itself? Fuel does go bad if it been around for a while. I have seen it where you couldn't get to burn when tested. Not going into how to this as it can be dangerous to do if done wrong.
Personally I have seen coils to fail sudden here in my shop after a especially severe lightning event but of I got a 2000' radio tower close by that draws the lightning so I have been stock in my a few times in the last 5 yrs because of the concrete floor. Just because you got spark outside the engine doesn't mean you have spark under compression; unless, it is able to jump at .166" or more. For a cold engine it also takes a stronger spark to arc the gap than it does once the engine is warm. A good example was Husqvarna ZTR that came running for deck work. I park it then a storm came that evening. The next morning I went to move to the repair area and it wouldn't hit a lick. A little tough to explain to that the coils overnight during that storm but he accepted it.
And a piece of advice don't be cranking the engine continuously for 5 minutes. It can overheat the starter and ruin it. The engine should normally fire up under 10 sec anyway ;though, a JD 737 I work on may take 20 secs sometimes.