OK - this seemed really wierd. When I tried putting the distributor back on, the gears lined up fine and everything was right on the marks I left. When I took it off to put the gasket on, it would only line up in a different place than I had marked (or 180 degrees in the other direction) - that being just a little to far clockwise.

When I looked down in the hole, I could see the piece sticking up with the slot (looked like it was made for a standard screwdriver head) running from left to right. After putting the shaft in again a few time, I noticed that the slot have rotated clockwise. After putting the distro shaft in a few more times, it had moved again. After doing it enough, the rotor now points to the right marks I originally made, but I am afraid that something inside has turned 180 degrees now and it will be all wrong.

Anyone know what is going on? It seems to be in the right place, but I don't want to start it until I know it is OK. I am sure the engine could not have turned from just putting the distro shaft in so many times, but something doesn't seem right.