So, I finally got it running. I have no idea how I made it home from a 3 hour drive setup the way it was. The guy before me did a bad job cutting away the wires and the ECU, ICU, and Knock Box. Also did a bad job wiring in the MSD 6AL (pn 6425).
Anyway, after getting it home, I had trouble the next day with keeping it alive while driving and it shut off on me several times. For the most part it did start back up with a lot of trying until the last time it did not start up that day. That is when the timing skipped a couple of teeth. Think that was from popping the clutch and a loose tensioner.
After putting a new timing belt on it and retiming it several times cause it would not start I realized I was not getting spark. Changed out a known good distributor (vacuum type) from my 87 Jetta (webber carb setup) and it ran for about 5-7 seconds. I was convinced I just needed a new distributor. I ordered one of Ebay and when it arrived to my house I installed it. Same thing, no spark at all. I put that in my jetta and it worked just fine. I retimed my engine and installed the distributor from my jetta and I had spark but no start. I figured the hall sender on the distributor was not able to give a proper signal to the MSD box so I wired in the ICU (ignition control unit). Once that was wired in (properly the second time) it started up like a champ.
So, with no ECU and Knock Box and with the wiring out, it does work. But you still need the ICU to send a proper signal to the MSD. Current setup is: 87 GTI, 1.8. 8V, MSD 6AL, MSD Blaster 2, ICU wired in, vacuum distributor, and Holley Carb.
Hope this can help the next guy who buys a VW like me with a carb and crappy install. I save pics for the wiring of the ICU to the MSD/Distributor in case anyone needs them. Just hit me up and I will send them. I just cant figure out how to put a pic here lol.