Electronic ignition issue

How do you feel about your cam drive? Any chance the top sprocket is plastic?

The reluctor should NOT be aligned with the pickup at TDC, but rather "where you set" initial timing. I run lots of lead, around 15* or so, and that is where the two should line up

You should be able to "set" your timing close enough to run in that manner. Bring the engine up towards TDC, but set the marks at wherever you want initial time. Then move the dist. to align the reluctor in the center of the pickup.

You should be able to get a "rough idea" of the condition of the advance by moving the rotor CW and then let it spring back. You should be able to move it against the advance springs freely, and it should snap back against the springs.

Take a good look and feel the shaft for sideplay and wear, and look at the cap and rotor for damage, which could indicate severe dist. bushing wear.