erratic timing on 360

I installed the shaft collar on the distributor and it immediately fixed my timing issue - well, the bouncing back and forth between two settings. Now I have a good steady mark at idle. Now that my mark isn't bouncing around, I can see the wandering around at higher RPM that would seem to support the timing chain slop diagnosis.

Looks like I had both problems, a bouncing I-shaft AND a loose timing chain. It runs much better now, we will see after a few tanks what happens to the fuel economy. Thank you all for the troubleshooting tips; the prize goes to Ch1ll for identifying the issue and $15 fix.

The timing chain replacement will happen in the near future when I get some time off work.
Can anyone recommend a quality timing set available on Rockauto that will be compatible with a tensioner and not tear it up?