just rebuilt runs bad

The machine shop installed the distributor as part of the build. Before installing the motor I removed the distributor, marking it carefully. After install I put the distributor back in, engine started after hard cranking. Checked timing, and it looked good but was bouncing a couple of degrees and the mark appeared very dim under the light. I ran the motor at around 1500 rpm for about 45 minutes. It actually sounded pretty good but idled a little rough. A test drive indicated a lack of power. I found that the timing mark that I was triggering off of was actually a scratch located about 60 degrees from the correct timing mark. At this point I figured I did not put the distributor back properly. So I found the compression stroke of #1, which lined up with the true timing mark, reset the distributor/rotor to #1, then followed the firing order. Started motor, and it ran bad, light triggering on the real timing mark about 12 BTDC, backfire through the carb and pinging. I went back to the scratch and the engine sounds good, but lacks power. This isn't right and I called the machine shop. They say the real timing mark was set 12 BTDC when they gave it back to me, this I didn't verify during install.

Since then I've verified and re-verified my TDC set up. I've used my thumb to feel #1 compression, and I've removed the valve cover to make sure both #1 valves closed. Compression is between 135 and 145 on all cylinders when set. To add flame to the fire, when I delivered the motor to the machine shop for rebuild I included a Mancini double roller timing chain kit. When I picked the motor up the machine shop said the kit had a problem and they were unable to degree the cam properly using it and gave it back to me.

Thanks to all for your response so far. It's appreciated. This all is very frustrating for me.