Well, you are only out $10. That's the good news.
The outer markings are seconds and tenths of seconds which the larger hand points to. The inner markings are minutes which the red hand points to
1) how do you read the dial?
2) what model is this and how old is it?Heuer called it the 7710 movement... but it is not a Valjoux 7710 according to the pictures at OnTheDash
It dates from the late 60s or early 70s.
3) Does anyone have any idea why it may not work?
It really is missing the balance wheel. All you have is the hairspring.
Now for the bad news - this is now a parts piece. But I bet someone will pay more than $10 for the case. Try flogging it over at OnTheDash.