What part number on this coil? Some of these coils are not designed to work with the high energy ignition systems such as the FBO system. I'm sure you researched it thoroughly, but I'm throwing out ideas here.

Those wires have definitely got too hot at some point but they may not be past the point of no return just yet, although you will have to replace the connectors. I'm just wondering with your combo if there may not be enough resistance or maybe too much.