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I just wrapped it with electrical tape and used a flat allen bolt (the name escapes me) to get more room. Been working 4 years now. 
Steve

flat allen bolt? you mean replacing the primary side dyna screws? 
that would surely help, i guess as long as the allen bolt isn't too long
great idea steve

I used heatshrink tubing to keep the coil screw from shorting out against the mount (they weren't touching, but close enough to be arcing a spark):






The strange thing is that the old dyna coils i had on the bike (same type) didn't have that problem

I gave up insulating the posts as the screw heads eventually work their way through it with vibration and short out.
The newer coils seen to be worse for this and i think that their mounting holes don't have as much leeway for clearance as the older ones.
Even with machining up the thinnest posts i could getaway with they still arced out eventually.
I now either make a  post for that side of the coil out of non conductive material, Nylon etc or in the case of my current projects an adaptor bracket that uses the furthermost mounting hole which gives plenty of clearance.

hey zed, is it the green and black wires most likely to arc, or is it both?

wrote:

hey zed, is it the green and black wires most likely to arc, or is it both?

Either will short.
It's a continuous current through the coils to the ignition pick-ups or points.
The dyna coils aren't polarity specific so the power feed can go to either terminal.
The lower one is the most prone to shorting due to the proximity of the mounting post.
The upper less so as long as you use a low profile pan head type screw/bolt.
If using a cap/allen bolt the top edge of the head can get close to the upper terminal.

10-4 i always want to know these type of things, may seem like a silly question to some, i dunno lol

Will there be any physical signs of arcing?  I will be looking into this on my 78 kz1000 after work today and wonder if there is anyway to know for sure if this is my issue.  My issue being 2 cylinders seem to drop out, not consistently and sometimes if I rev it up real good it will over come that....temporarily.  It also seems to happen after the bike is warmed up.

wrote:

Will there be any physical signs of arcing?  I will be looking into this on my 78 kz1000 after work today and wonder if there is anyway to know for sure if this is my issue.  My issue being 2 cylinders seem to drop out, not consistently and sometimes if I rev it up real good it will over come that....temporarily.  It also seems to happen after the bike is warmed up.
 

That may be the result of arcing, but the first thing that came to mind is that one of your coils may be starting to fail. It can work well when cold, but as it heats up the errors can become more pronounced. Eventually you will get less and less run time out of the coil before it stops working, e.g. if you can ride for 30 minutes now before it acts up, soon you will get only 20 minutes, then 10, etc. unless the coil just Fails (capital F) in the meantime.

It's difficult to test this unless you're prepared to ride around the block, parking lot, etc. until it acts up, then pull out the multimeter and test it immediately.

I saw the coils arcing against the mounting post; it looked awfully close when I installed them, so I started the bike without the tank on and was able to see the spark jumping.  That's what prompted me to slide some heat-shrink-wrap over the posts on my Z1 (see above pictures). That was several thousand miles ago and I haven't had any issues since.  I've also never had any issues with those screws loosening.

I guess it could not hurt to shrink wrap the posts anyway.  My problem right now is finding a screw drive to get them off.  Not sure how I did that before.  What are the coils to use in place of the dyna green coils, suggestions?

I don´t know if no one come up with the idea to made some simple brackets that gives you a lot of space?!?!