So very stuck...

You don’t need to pull the distributor. The movement in your rotor is the mechanical advance and it’s completely normal. It makes no difference where it’s at. Leave it where it is. Do this, roll the engine over to whatever you want your timing to be, (16-18 deg BTDC) then see where the rotor is pointing. Make that terminal number one. Get it?
By the time this video was posted I had already rolled back the gear. It's working well though, set it at 16* and getting 36* all in. No more tail pipe popping. I'm going to test drive it here in a bit. 1 thing I would like to ask about, the position of the AV is pointed directly at the intake leaving almost no room to plug in the VA. Is the VA neccessary? And if so would dropping the timing to 14 and giving the vaccum hose clearance be a bad thing? Does the VA make up the lost degrees?