The hold down needs to come out and flip over. It acts as a clamp on the lip of the distributor to hold it into place so you don't lose timing. Once that is flipped over, the distributor should drop into place as it should be. If it doesn't, you may need to blip the starter relay to seat it onto the oil pump driveshaft if it's not engaging it as it sits now. You'll probably want to double check your timing once you've done that before you secure your distributor.
