So just how many degrees are you turning the distributor? If your ignition timing is 40 degrees advanced, then you should be able to turn the distributor 20 degrees CW and get it to 0. Or will the distributor body not turn 20 degrees CW?
If you turn it that far, and the engine starts to misfire, then that sounds like the rotor is misaligned. If it just starts running with a poor idle, then you have some tuning to do.
Try setting to 20 degrees advance, where your damper mark is at the 10 mark CCW from the timing cover's 0 mark (based on your 0 Mark pix) and see how it idles.