Re: Mercruiser 496 cranks but will not spark and no rpm on Diacom...
Keep in mind that it is possible to have a bad CPS even though the ohms tested good due to excessive or abnormal wear or dirt. Though this link is for GM trucks with the 8.1L engine, it's the same concept for the actual sensor, Ignore the first few steps of how to get the sensor out,
2002 8.1l V8 Crankshaft Position Sensor - Fullsize Truck & SUV - GM-Trucks.com <<< Edit: On 5/9/2016 I just noticed the images are removed from the first link...Here is a similar 8.1 crankshaft removal, inspection, installation guided covering the crankshaft sensors ware down inspection with working images....
https://www.2carpros.com/questions/chevrolet-silverado-2002-chevy-silverado-crank-postion-sensor
Also the CPS for your 496 engine is really GM part, it's not necessarily a mercruiser part for this particular case. This way you can find a CPS at a better price using say a 2002 8.1l chevy suburban if needed. It's the cheaper way of throwing parts at it till you find it.

oops, did i just say that out loud!:brushteeth:
I thought it was the Crank position sensor, but the sensor passed resistance and contuinity test as did the camshaft sensor.
I have checked contuinity on all sensors and wiring.
Have you ensured that all the wire pins inside all the connectors have not been pulled or backed out just enough to lose connection with the sensors or PCM?
Also have you disconnected the gray wire off the back of the tachometer?
Typically, no RPM signal is CPS related, but could be Camshaft Sensor or PCM related as well.
Please keep us updated on how this turns out, Good luck.