The wobble joint was a factory fix.
I can't buy that story. If it were true, the point dist in the first 250-292 blocks would have had the same problem. The problem you described using the HEI in the 235 block might actually be solved using the wobble joint. I still don't like the looks of the thing and I think it would cause accelerated wear on the bottom dist bushing.
My book shows the 2.8 dist with two different kinds of pickups. One uses a Hall-Effect pickup and the other the more conventional GM style magnetic pickup. Not having a 2.8 dist here to look at, would it be possible to use the large body, .490" shaft and pickup in the 2.8 housing?
If not allowed to move, will this be enough lateral support? Is this how Langdon's mini hei is getting away with a smaller diameter shaft?
I'm not sure it is working. The small shaft dia has been discussed here before. One guy with a 235 lost the pump, dist gear and cam from what I believed was caused by the small shaft.
If your REO engine doesn't use a gear on the dist shaft it does sound like it would be OK. A bushing like you mentioned in your first post sounds even better.
I'm going to take a look at the 2.8 HEI housing. The Corvair flat six and the L6 use the same point dist housing. The only difference is the Corvair has a much longer shaft. The Corvair shaft in the 2.8 housing might be the HEI I've been looking for.