I just rebuilt my 77 dt250. I suspect that it had some timing issues before. I snapped 2 kickers from it kicking back so hard and went to the hospital once. Anyway at least it would start. After assembling I matched the marks left by the previous screws and figured I would adjust the timing after I started it. Now the kickback problem seems to be even worse. The bike has great compression and the spark seems just fine. So I was just wondering how to set the timing on a bike that wont run. My manual says nothing about it. 

What you did is the first step of the best practice...  put the stator back as close as possible to where it was.

To set the timing you use a dial indicator to locate the piston BTDC and then adjust the points so they just open with the piston the specified distance BTDC.  If you don't have the tools, if you're lucky the timing tab that lines up with a mark on the flywheel might be unmolested and you can get close using that.

The factory service manual in the tech library has the timing procedure in Chapter 2 page 13...  or there are many posts on timing here if you search

Ok an essay or sermon below but i'll leave it now i've typed it. If you can wade through just pick out what's useful--if anything.

Wow, i'd be surprised if you could get the timing far enough out to kick back hard enough to break the kickstart let alone two kick starts & a trip to hospital.
My thoughts are with you but hope ya all healed up now for another try. But first get the timing close to 3.2mm btdc.
That said my first thought is crank key is missing? & by shear luck you're getting the timing in the ball park albeit a very big ball park when fitting the flywheel.
Ok maybe i'm overstating things but you also say you'll adjust the timing after starting it which i don't quite understand as isn't possible while running.
Just a random thought though.
Has it got points or has someone fitted a CDI mag of a "79 DT250 or a 400 because if that had a faulty pulser coil or something haywire then maybe time for a re-think.
If none of that applies then are you kicking it from the top & also kicking from against compression so your first movement of the kick is going through 'that compression' & it should strike the next compression near the bottom of the kick stroke so you got through the first one then catch the second one at speed--good kick speed--& it should start as it goes through that second compression near the bottom of kick stroke.
If you do it wrong & move past comp with lever then start kicking, you'll arrive at compression halfway down on the lever & it just doesnt work or will bite back.
So find compression with the lever, then bring it back to the top so you then kick 'through' that comp right from the top.
If you accidentaly push through compression getting ready to kick the then go through the process again so you're doing it right from the top with compression.

I was starting to doubt my own advice so i just went out in the dark & fell over everything in my messy shed & tried the 360 then 250 by hand & pushing through the first comp at the top of the kick stroke it finds the second one about 3/4 of the way down so you have good kick speed going on by the time you go through the second one.

Alright, so I bought a dial indicator and a multimeter, even made a test light setup. The problem I'm having is no matter what I get a reading that the circuit is closed. I connect one wire to the black and white wire coming out of the magneto and the other to a case bolt. No matter how far I turn the crank the light stays on and the multimeter indicates the circuit is closed. How is this even happening? I tried all the other wire on the magneto harness just to make sure and 3 out of the 4 were closed no matter what. The fourth one did nothing.

You're not alone.  This same question has come up at least 1000 times here.  It's a magneto and does not behave the same as a battery ignition. 

Assuming you haven't accidentally shorted anything during assembly, you "might" be able to see a test light dim very slightly when points open.  (You certainly didn't find a "test light" method in a repair manual for one of these bikes, there's a reason, it's a crappy method in my opinion and might not work at all)

Many digital meters are useless for this.  An analog meter with an "Rx1" scale works best.  Points closed reading should be full scale zero ohms and with points open should be roughly 1 to 2 ohms or so. 

 I did in fact find it in my repair manual. I see in the manual in the tech library here it says to use a point checker. Should I try one of those instead of the analogue meter like you mentioned? 

You found the instructions for using a test light to check timing in a repair manual for a 1977 DT250?  The method works fine on many ignition systems, not a Yamaha points magneto.  I wouldn't use that manual as the information on using a test light very wrong for your bike.  Factory manual in in the Tech Library.  Clymer and Haynes also make good manuals that often explain a bit more than the "Factory" manuals which are geared more towards experienced mechanics.

Points checker works fine if you can find one.  It's just an ohmmeter with a custom scale.  If you get a analog ohmmeter, it's CRITICAL that it has an Rx1 scale setting.  They can be found for less than $20 US.  (Some of the inexpensive meters don't have Rx1 capability...  lowest scale might be Rx10 which doesn't work well if at all)

(The absolute best and easiest tool is an aircraft magneto points checker which senses the change in inductance when points open.  They have gotten expensive...  probably $80 or $100 but I love the audible tone and light which makes it really easy to use...  I bought mine many years ago when they were a lot cheaper)

To my way of thinking, if your stator looks like this in the link below with three slot & if you fit it so the slots are about half a screw head towards retard starting from a centerline of the slots [that's moving the plate left [anti clock] in the slots half a screw head.
Then give the point 12 thou gap & it should run.
When gapping them don't go 'way' around once they open, less than 1/4 turn guessing.
In fact if the points just visibly start to move as the beginning of the slot has them visible, then call maximum gap as the slot heads away 'forwards' from them but still has them visible.
It won't kick back but If it sounds lazy or retarded then give the points 15 thou gap.
Can't fail providing the "Crank Key" is securing the flywheel?.
Just me trying to keep it uncomplicated at the moment.
Or am i reading it wrong & you don't have spark at the moment?.
If no spark at the moment then setting timing accurately with all the good gear won't produce spark if there's a fault.
Damn it now i've gone & complicated it sorry.

photos.app.goo.gl/128is37HoqVmPa8E6

I took Mark's advise a couple years ago and bought an aircraft magneto points checker and love it. Paid about $80.00 and well worth it.