So very stuck...

I was adjusting the distributor by retarding the timing I would start to get a tapping noise. I'm making a guess that it's the rockers, but in all honesty it could be the hydraulic lifters as well.
Got it. So something was making noise. Here’s the deal, timing is not something to dilly dally with. MAKE your timing what you want it to be. The numbers I listed above are a good starting point for a street engine with mild compression and a mild cam. Don’t guess, don’t assume, don’t make it “about” 32 degrees. Set it dead on nuts. Then move on to something else if it still makes noise. Also, before you even begin to set anything, do yourself a favor and verify the TDC mark on the balancer is accurate. If it’s slipped or off a few degrees your timing will never be what you set it to.