Hmmm u should check the wires going to the coil to see if there is power, if so its mostlikey the coil, and if the coil seems fine you gotta track father back, do u know about the prelude board? http://www.preludeonline.com/ they probably know something about your issue, sorry for the long responce time, was out on my summer vaction !!
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U need to re-timed the engine. Check all four marks going across the two cam pully is lined up with the engine head surface.
Then check the crank pully alignment mark the single notche align to the mark on the timing cover
If you are carburator or fuel injection you should have a tach meter hopefully it works. Crank the engine does the tach slighty move this small movement tell us if you have spark. You state no spark at coil 3 item that wont allow spark to happen the magnetic pick up the ignitor and the coil itself.Or even the distributor cap itself. 2 main failure for no spark is the ignitor itself. and the magnetic pick up
I have a similar problem with the S3 light flashing and the check engine light coming on as well as surging issues. On '88-'91 Preludes the ECU is located under the carpet on the right passenger floorboard. There will be a small flap in the carpet you pull up to see the ECU LED. Turn the key to ACC(radio on, but not started) and follow the directions on the link below. http://mustardcat.brinkster.net/p3g/Documentation/ECUerrorcodes/ECUcodes.htm