Help with timing and some wiring (pics)

OK, I set #1 to TDC according to the pointer at the balancer, and pulled the cap off to see if the rotor was at the #1 post on the cap. It's off by a bit. The black dot and sharpie indicate where the # 1 post on the cap is at when its installed. I guess if I measured the distance it would be about 1/2 to 5/8 in. Should it be right on the post, is it a tooth off or should I leave it alone?

Also, I took a pic of the area near the starter solenoid. There are a couple of wires that I need help identfying.

100_0291.jpg


100_0293.jpg


Theres a black ground attached to fenderwell that has been cut and is not connected to anything. The grren wire comes out if that harness is attached by connector to another wire that runs up front to just behind the headlight but ends there, it's also not connected to anything. And finally the white/blk wire that comes out of that harness that is also cut and goes nowhere.

I'm hoping that someone can let me know what these wires are for and what I should do with them.

Thanks for the help guys, don't know what I'd do without the knowledge found here.

88 5.0 5 speed

Jeff
 
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rotate the crank to 10º before TDC and then restab the distributor to point to cylinder 1. If you are as close as the pic illustrates, you can loosen the hold down bolt and rotate the cap a little to line up
 
Starter solenoid wiring 86-91 5.0 Mustangs with standard starter

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The picture shows the common ground point for the battery & extra 3G alternator ground wire.
A screwdriver points to the bolt that is the common ground point.
The battery common ground is a 10 gauge pigtail with the computer ground attached to it.

Picture courtesy timewarped1972
ground.jpg


Correct negative battery ground cable.
56567d1230679358-positive-negative-battery-cable-questions-86-93-mustang-oem-style-ground-cable.gif


3.) The computer has its own dedicated power ground that comes off the ground pigtail
on the battery ground wire. Due to it's proximity to the battery, it may become
corroded by acid fumes from the battery.
In 86-90 model cars, it is a black cylinder about 2 1/2" long by 1" diameter with a black/lt green wire.
In 91-95 model cars it is a black cylinder about 2 1/2" long by 1" diameter with a black/white wire.
You'll find it up next to the starter solenoid where the wire goes into the wiring harness.
 
I recommend you re-read my post and the reference to the heavy gauge black wire... There is a computer power ground in that area, and without it, the computer doesn't work properly.