As mentioned, the LED is simply an indicator on the XR700 Box... not the dizzy module.
Early Crane and even earlier Allison Boxes do NOT have this LED indicator.
The dizzy module uses an IR LED to trigger the photocell - not visible light, so there's nothing to see here.
You can check the coil charging circuit (primary coil) with a DMM, this should trigger when the shutter wheel slot passes the dizzy module.
Make sure you have good grounds and also that you're running the proper resistance at the coil - Black coil needs a ballast resistor, Blue coil has internal resistance, so no ballast resistor is required.
With everything at/near TDC, you should be able to start the car by rotating the dizzy body say 20° in either direction, if not, you have a wiring issue.
Also, I know this sounds stupid, but you do not use the condensor with this setup, but you do need to be sure that the former condensor wire is shielded and not grounding out - this will prevent the car from starting, or will kill the engine if it grounds out. Be sure it's tucked away after either using a crimp end cap on it... or wrapping it good with electrical tape.
Cheers!