Use your timing light to find out what your timing is at right now before you start the project. That alone could be the crux of some of your running complaints. Tell me what it was.
At the parts house ask for a GM HEI (make sure it's for HEI) adjustable vacuum advance unit. It's a performance part, but not "pink."
They will probably have to order it, it's not an unusual part, just not a normal stocking item.
Speed and performance shops have them, maybe even boat shops.
It's easiest to install it before you put the distributor in. Read the instructions, most require an allen wrench through the vacuum port. Set it for the tightest, or least sensitive setting, it seems backwards, but "tight" is screwed all the way out (inside you are making a spring work harder.)
Install the little limiter cam that comes with it, otherwise you'll really regret it. Set it so it only travels about 1/2 way (that's about 15 degrees.) Again, you'll see.
Determine which is #1 on your present cap, mark it so you can locate it again easily. Make note of all the other wires too, where they go etc.
Roll the engine till the timing mark on the damper lines up with the pointer.
Take off the cap - if the rotor tip is not pointed at where the number one wire was, roll the engine over 1 full turn till the marks line up again - it should be close now.
Now your engine is at TDC, you can take out the distributor now.
Do your grinding, cover the hole so no filings get in. The tiny abrasive pieces of the grinding wheel - well you can imagine what they will eat inside your engine.
Install the new distributor, make sure it seats all the way down, the very bottom of the shaft has to line up with the oil pump shaft deep inside - look in the hole while it's out, you'll see. If the shafts (tang and slot) don't line up it won't seat all the way down, maybe 1/4 inch up too high - it's important it seats properly. You can damage the pump shaft, pump, or suffer a loss of oil pressure. No forcing it, no hammers, no pressure at all. If it's lined up properly it will drop right in. You may have to reach in the hole and turn the pump shaft a few degrees to line it up. DO NOT TURN THE ENGINE AT ALL. You won't like the procedure you'll have to go through to find TDC again without a distributor in it.
Place the HEI cap on the distributor - note which terminal on the cap says #1. Mark it so you know where the rotor should be pointing - mark the manifold, a hose, splash panel, something to use as a guide.
Remove the cap again.
Install the rotor (watch the keys, square and round holes underneath). If you are lucky it will be pointing at your mark you just made. If not, lift the distributor up about 1/2" till the rotor will turn, position it so that when the dist is all the way seated, the rotor is pointing very near your mark.
You may have to do it a few times, you may have to take it all the way out and reposition the pump shaft with a long screwdriver, but it has to be done right.
Once it's in right, put the hold down bolt in, tighten gently, barely more than finger tight.
Wire the rest of the plug wires, clockwise, 1,6,5,4,3,2.
Wire the primary. Bypass the resistor on the firewall, run the wire that used to go to the + on the coil to the BATT terminal with a spade lug. Ditch the wire that went to the starter solenoid from the coil.
Hook your tach wire to the terminal labeled TACH, also a spade lug.
Start it.
Use your timing light to set initial timing to 8 degrees by twisting the body of the distributor. Lock it down, not gorilla tight, just snug.
It's actually easy, the total time should be about 1 - 1.5 hours.
Use the same plugs, some people will tell you otherwise, but changing the heat range is dangerous, a good way to burn valves etc. Use the same old firing order as before. If you want you can set the gap wider to .035, even up to .040.
Actually you haven't changed anything to do with the engine, all you've done is changed the way the spark is created. Now the spark has a little more voltage and lots more amperage. The rise time is much faster too, thet's what really makes the HEI shine.
You'll find it outperforms all these so called MSD's and "pink" high performance stuff. (Funny, MSD's - Multiple Spark Discharge, systems don't do what they are professed to do at speeds over 3000 RPM where it's needed the most. There simply isn't enough time to light the plug more than once. You can easily see that on a scope.)
The only negative is if you have to push start or roll start it, you have to go much faster before it starts.
Carry a spare rotor and module, the weak links.
Enjoy