Engine cam break-in - What should I do with my 340?

-No.But almost.
-While that is the only way it will run, if on the top of the compression stroke, that part is correct. and so is the part about rotating the dist.
-However,establishing the time of firing is controlled by the reluctor passing by the mag. pick-up, or if points, the moment they break circuit with the coil.
-So using your example; Starting with the no 1 piston just before TDC on compression, you could line up the mark on the balancer to the 12* BTDC on the index tab, just as you describe. Then with the Ignition system powered up, you would remove the coil wire and lay it on a grounded surface with about 1/4 " air-gap, then retard the dizzy in the neighbor hood of 1/12 turn( exact amount not important), And finally advance the dizzy until a spark occurs. Then index the the tower that has the no 1 wire to the dizzy body, remove the cap and prove that the rotor is at or near to that mark. If its not; make it so.
-This means one of two things is wrong; either the hi tension wires need to be reclocked, or on rare occasions, the reluctor needs to be reclocked, or on even rarer occasions the the trigger polarity may be reversed. Iknow, I know, thats 3 things.But #three is rare
-The rotor only needs to be close to the tower, The coil will push the spark quite a ways over to it. If it gets to be too far away, sometimes it will fire to an adjacent tower. This is not good. So grab the rotor and rotate it to the end of its operating range to make sure its still closer to the indexed tower( the one you marked), than to any other tower.
-Earlier I instructed you to remove and air-gap ground the coil wire and watch for spark. This is a newbe method. You can just as easily leave everything together and just listen for the snapping noise that the spark makes as it arcs over to the tower. You could also pull the no1 wire off the sparkplug,air-gap ground it, and watch/listen for spark there. Either/any method will work.
-Instead of rotating the dizzy with the crank at 12BTDC, you can set the dizzy to 12* and back up the crank, then bring it forward to prove the spark jumps at 12*. Its just way harder, and overkill for first start.
-For first start and cam break in, I would do as you are doing. As soon as it runs crank up the rpm to 2000ish plus. First thing is to check for oil pressure, then leaks;first,fuel, then oil, then coolant. As soon as thats done I grab the dizzy and advance it as much as the engine likes. As long as the rpm is increasing shes liking it.Then return the idle to 2000. Then fiddle with the mixture screws listening to the engines response. As long as the rpms are increasing, shes liking it. This should only take a minute or three. Next grab your IR gun, and check the engine temp. After that take a deep breath and just sit back with your garden hose and IR gun at the ready, checking temp.every minute or so, and watching for leaks of any kind. The first 5 minutes can be hectic, so I suggest a rehearsal or 2, or 3.....
-If the carb has a fast idle cam, I might be inclined to use it, as emergency shut-downs are less dramatic if you blip the throttle to kick it off, just before you kill it. But it may not be the best idea for a first-timer.With all the busyness going on in those first few minutes,worrying about a break-in speed compromise, should the fast idle cam slip, need not be one of them. If you are diligent before twisting the key, it is usually a cakewalk.

Best of luck to you.