Installed distributor - Now it makes a bad noise

ok, well the problem is back... This ones really got me confused. For some reason the noise only manifests when the cap is on. I might just be getting unlucky but we've been at this for about 10 minutes and I can't get it to happen when the cap is off. There is no sign of damage to the cap or the rotor. When I do get the noise its loud and screachy kind of like grinding gears and sometimes we get a puff of what i assume is fuel out of the carb. WTF? I'm at a loss here.