I agree with Scottie.
The engine should be totally grounded and it should make no difference if the test was done between the hot wire and the engine, or the hot wire and the battery negative terminal.
A engine without a direct ground to the battery will still allow the spark plugs to fire but the intensity of the spark will be considerably less.
That's because rather than going directly to ground, the high voltage spark is treating the engine block/cylinder/head as a big capacitor. In other words, the spark is arcing to the engines mass rather than to ground.
The weak spark produced can cause engine misfires, especially when the engine is under load.
Run a good grounding wire from the ground wire on the battery to any bolt on the engine. The "head steady" comes to mind as a possible attachment point but if it is used be sure to torque up the fastener to 37 lb/ft (50 N/M).