I think I'm getting brain cramp but I'm tossing this out there as my conclusion.
Consider that the distributor lobe has 8 positions, each dedicated to its own cylinder in the firing
order.
Moving the the rotor 1 tooth, moves the #1 position closer to either #5 or #2 position on the cap (depending
on direction rotor was moved.
The #1 position is now using either #5 or #2 position on the lobe.
So now when a timing light is used on #1 wire the signal is really giving an indication of timing
for either #5 or #2 position.
That is why it will not show correct reading on indicator.
If when the problem was first detected, the timing light was connected to the #5 or #2 wire
the pointer and dot would have been illuminated..
