There was a simpler (for us to see) way in the past....a mechanically advanced "breaker plate" which originally mounted the points and later perhaps just a pickup. For the manufacturer, what you have is likely simpler. As it sounds like you got your igniter apart, is it repairable (or was it a destructive process.....potted etc)? Most likely what you have is a pretty simple circuit - why not reverse engineer it and either repair what you have or build your own with similar but perhaps more readily available components. Your cost to buy that unit has little to do with the cost of its component parts and more to do with supply and demand and typical lack of standardization.
You mentioned a failsafe mode but then answered your own question by noting that it might take extra circuitry to insert the delay (just one possibility for failure). One such system used in the past was to trigger the ignition coil (i.e. to be an igniter) via a capacitor discharged using an SCR (CD ignition) - Timing voltage was picked up via a coil being swept by a magnet on the flywheel (small engines). Advance and retard were effected by nothing more than a simple RC circuit (fixed time constant) which was overun as the engine sped up (capacitor didn't have time to charge or delay the build up of the trigger for the SCR). These types of modules often had nothing more than a few diodes, couple of resistors and caps and of course the SCR. They MAY have used a seperate supply coil (Dirt bike with no battery) which built system voltage just before the ignition was required......this could have been supplied by a battery as well though (as supplied by for cars and trucks).
With older mechanical technology you faced similar problems to what you've experienced. The breaker plate (or perhaps just a moveable breaker cam) could be "stuck" at some advance anywhere between low and high speed (not to mention the points themselves, if used). The only thing is with this "cave" technology is that you might dig out some lube and basic tools and fix it right there. A good thing with electronics is that you might go a long time before needing a fix....it's all in whats acceptable to YOU.
It sounds as if what you think you want could easily be much more complex than what you're replacing (hopefully an engineer, ANYWHERE, will read this and take heed!) Keep in mind the operating environment for this circuit or problem as well....do you want anything that is adjustable or prone to corrosion, immersion, high heat, extreme cold or mechanical failure in this severe environment, considering the consequences involved (you walking 20 miles home out of the bush for example).
Just meant to be food for thought and to sure not deter you from your pursuit - from someone who's been thar 'n done dat.
Gord