Can a small block timing chain jump a tooth?

I have a low compression 340 in my 65 Dart. All of a sudden I had an engine surge, the engine kept running, I shut id down and would not start again. I checked everything on the outside and all seem fine, nothing obviously wrong.
Then I put a timing light on it and start playing with the distributor back and forth and got it running again. The catch is that it starts at 33 degrees initial....which cannot be right.
I changed the distributor with a spare one, same thing.
I brought the engine to TDC and the timing on the crank seem spot on. But the rotor in the distributor is way pass #1 cyl...
The engine was rebuilt 3-4 years ago, it has iron heads with larger valves, around 9.3-1 pistons, whiplash cam, nothing else fancy inside. The engine run great, no problems for the last few years.

What do you guys think may be the problem, before I start tearing into it?

Thanks,