Set timing, hei mod

GM HEI module needs to be grounded to your distributor, the modules have a plastic tit on them that needs to be ground off so it fits flat, then install with the silicone jell that comes with the HEI module for good contact to ground.
They need to be grounded but not necessarily to the distributor. Not all HEI modules were even mounted in the distributor. The pickup coil is NOT grounded, rather an isolated two-wire hookup. Yes the locating "tit" either needs removed, or a clearance hole drilled in whatever bracket upon which it is mounted.