1968 340 timing

It matters not a bit, how the driveshaft is indexed.
It only matters that the wire that goes to #1 cylinder is in the tower that is nearest to the firing-tip of the rotor when #1 cylinder is on at or just before TDC, on the compression stroke. Nothing else matters.

Lets say you have rotated the crank and found compression in the #1 cylinder. And have rotated the crank until the piston has come to the top. So now it is at or near TDC-compression. You don't even have to know where the Timing index marks exactly are, as long as the piston is at or just before TDC-compression.
Next you can drop the Distributor into the hole in absolutely any position, so long as it engages the driveshaft which can be in absolutely any position.
Next, you push the V-can back until it hits the firewall, then pull it back towards the rad until the nearest vane lines up with the little metal bar called the pole-piece, on the magnetic pick-up; or the points just barely break contact. That's where you snug the D down.
Now you have exactly two data points; namely #1-TDC compression, and the lined up vanes. In this position the engine is almost ready to fire up and run . At this time, I like to back up the crank to about 10 to 15 degrees advanced, but this is not required.
Next; you correctly install the rotor, it only fits one way, and it matters not where it is pointing. then you mark the body of the D with a sharpei, exactly where the firing tip is, in such a way that you can see the mark when the cap goes on.
Next, you install the cap,and go find the index mark you just made. Whatever tower is nearest the sharpie-mark, will be the tower for the wire that goes to #1 cylinder. And the rest follow in the correct firing order, in whatever direction the rotor travels, CW for SBMs.
The idle timing is now as correct as you can make it, before ever starting the engine. For idling, you have a huge window of timing to get into, and the engine will start and run; I'll say from 5* retarded to 20* advanced. or until the starter kicks back. That's a 25* degree window.
So now, hit the key.
As soon as it starts, and NOT DURING break-in; you tug on the V-can advancing the timing, until the rpm peaks. Then retard the timing some arbitrary amount until the engine complains about it. Then put it somewhere inbetween those two points.
Now, you can install your timing lite, and read where it actually is
If you cannot find the index mark on the balancer;
1) Either the index mark has climbed under an obstruction, which could indicate too much advance, or
2) your balancer and timing-tabs are not a matched set, in which case you simply swap your timing sensor clamp to the next or previous cylinder in the firing order, until the balancer mark shows up,or
3) you are accidentally not on the #1 wire, or
4) your timing lite is not compatible with the MSD Multi-strike.

If the engine fires up and runs, then as already said, it matters not how you got there, but it's right. You can take the D out and stick it back in in any new position, with the #1 piston at TDC-compression, any old way you want to, and the only thing that will change is where the rotor is pointing. And then you rewire the cap to put #1 wire in the new tower, and then Presto!, away you go. And you can do that all day, and it won't make your engine run any different.
Now, the FSM tells you to put all together in a certain way, principally because......... the multi-length factory plug wires fit best in that position.

I purposely left out rotor phasing, so as not to muddy the waters