The distributor housing can have a little play in the block without a problem. Watch out for play between the shaft and the distributor housing, however- - - -that changes the point gap and causes variations in spark timing between cylinders. There's a spring and a plastic disc under the grease cup that's supposed to keep the shaft pushed against the housing to minimize shaft wobble, but that's a band-aid fix. I modify distributors to put a Torrington needle bearing at the top of the shaft and eliminate all the slop, resulting in no timing changes between cylinders at all.
Jerry
