Any GOOD ground will lead back to the negative terminal on the battery, no need to go directly to the battery. SO, I'm going to ASSUME you have a really good ground connection between the engine block, the frame of the car and the negative terminal on the battery. Therefore, engine components or the frame ARE the "negative" terminal of the battery. Any ground wire that connects to the frame or the engine is thus also a good ground connection back to the negative post of the battery.
Doltz, on that diagram the only thing I see missing is a small red wire from ignition to the MSD. You show the big red heavy wire direct to a positive battery source (the solenoid) which is good, but you also must have the little red wire that "turns on" the MSD when the key is on?
MSD usually states some where in their literature that they recommend a ground wire directly to the negative post on the battery. Thats just to cover their butts on the ground issue because they (like myself) don't trust what YOU think represents a good ground.
They wanna know for SURE when you call tech support and say, "It don't work". "Did you run a ground direct to the battery"? "Uh, no..." "Do that first and then then call us back".