Are you sure that you're on TDC on the compression stroke? You may be 180 out. Try taking off the rocker cover, turn the engine over while watching the rocker arms. Both valves will be closed on the compression stroke. Check th rotor to where it is pointed, then install the cap and wire it from that point. The distributer doesn't realy care where the rotor is at, only that the rotor and wire fir at the right plug.
I wouldn't mess with the advance/retard just yet. Get it running first.
