I was right to think that I was wrong.

Here is a better run down now that I've read up and slept:
Line up the mark on the cam with the head mark. The cam has a hash mark just behind the gear.
The crank pulley should be lined up at 0 degrees
The slot the dist shaft fits into should be straight up and down with the slot offset toward the front.
The dist should have #4 at about firing position
I got to thinking last night. If your block is a G200 and the head came off a 76, it could be a compression problem. I have a truck with a similar setup (newer motor, older head) and it comes up with 195lbs of compression when tested. The G200 head could have a bigger chamber, so putting a G180 head on a G200 block might be raising the compression ratio up there to where detonation is happening. I have yet to get that truck I have like this on the road, only just running at idle, so I don't know what effect it will have.