Set it up on falling edge as that is a stronger transient signal and gives a completely stable trigger point as rpm changes. There's an oscilloscope trace somewhere on the MS site backing this up, shows a clean almost vertical transient.
Sounds like you have the gist of it, standing in salt water and maybe holding the coil lead in the teeth should help locate the spark.....
As I said earlier, you only have to get it approximately in the correct place and it should start, albeit running poorly. Then you home in on the real figure with the MS software and plain old "dead reckoning"!
Agree with the fun part, I found it a great hands on learning experience.