I had the same problem, I removed the distributor cap, checked the rotor and noticed the screw that holds the rotor in place on the shaft was missing, replaced the screw and everything worked fine.
What are the best Mercury repair shops?
RepairPal Certified shops can diagnose and repair your 2000 Mercury Villager. They provide transparent pricing with a minimum 12-month or 12,000-mile warranty on repairs and services.