"It barely ran again but stayed running and then I tried to adjust back into Time in little bitty steps and engine would cut off and would not start unless i put it back to that Out of wack point. What do you think about that?"

I think you have more than one problem going on.
What do you mean by "tried to adjust it back into time". The motor will tell you where it wants to be. Just move the distributor to where it runs and leave it alone for now. If you have to take the distributor out and re-stab it because the vacuum can is hitting on the manifold, then ok, take it out and re-stab it one tooth either way. The motor doesn't care, it just wants spark at the right time in relation to the position of the piston in the cylinder. It doesn't care where the cap is rotationally, or if #1 position on the cap is pointed toward the 5:30 O'Clock position like it's meant to be or if it's pointing toward the firewall. I'm fairly sure the timing chain has jumped a tooth, but you can still get the motor ignition-timed properly until you can change the timing set. I understand the damper ring is useless, so I'm going to outline how to set the whole mess up properly AFTER you change the timing set. I wrote this for the wiki on another forum, but I don't think anybody will mind if we use it over here.

http://www.crankshaftcoalition.com/w...op_dead_center

"Can I use the old holes (after sanding them down) or make new ones?"

You can do it any way you wish. I'd leave all the old stuff alone and make new connections if it were mine, but that's just the way I am about things.

"But what your saying is this could explain the 6v reading im getting when the car is cold?"

No, I'm not sayin' that. I don't have any idea how that's happening. With the key on and the wire disconnected at the coil and putting a meter between the end of the wire and ground, you're getting 6v?