No, no truth to that at all! The rotor has nothing to do with grounding. High voltage comes up through the center electrode and the rotor points to the correct terminal to fire that plug. In fact, the epoxy helps with insulating the rotor.
The points or electric eye however are grounded to the distributor body. If the ground wire from the distributor body to the distributor mount is missing or broken, Grounding will be either sporadic or non-existant. The grease inside the mount effectively insulates the distributor body from the block.
.019 is WAY off for any set of points. Car points will probably not work unless you get the correct set. Chrysler did use standard parts and it is likely that points were standard ones. Correct gap is .010. Condenser is critical too.
So: Your engine has battery, points and coil ignition rather than electronic. Points gap is critical as it sets the dwell to insure full saturation of the coil primary and maximum spark. The condenser absorbs current surge when the points open and prevents arcing across the points thus decreasing pitting and extending point life. However, the wrong condenser will adversly affect primary winding saturation by absorbing too much or too little current surge. When doing a conversion like this, you must be careful.
Did you reset the distributor to top dead center with the flywheel set at TDC too? Did you retime the engine to 30 degrees BTDC?
For the correct points and condenser, try Standard Magneto in Chicago or try
franzmarine@aol.com. Points are not cheap but if they work, they are worth it.