DYNO disaster ? Help

You can start with making sure the timing mark stays steady by using a dial back timing light and reving the engine from idle to 2500 and hold and check the mark. Then go up to 4500 and check again. If the timing jumps around there can be several causes:
First, the timing chain. Easy to test. pull the ignition cap so you can see the rotor. turn the engine by hand clockwise about 1/2 turn. Then watch the rotor while you turn the engine counterclockwise. If the crank turns more than a few degrees before the rotor moves, the chain is loose.
Second, the oil pump drive. Pull the distributor and take a large flat blade screwdriver and put it into the slot in the top of the drive. Then apply pressure side ways on the drive away from the cam. If the drive can be moved in any direction other than rotating, the bushing and drive must be replaced. It's common in cheaper builds to re-use them with a new bushing... These parts wear in together so replacing 1/2 can lead to issues quickly.