Removed distributor... problems!

Set the number one cylinder to TDC and place the distributor to fire on number one. This will get you close enough to start the car then you can set the timing from there.

Take the coil wire out of the distributor. Pull #1 plug, put your finger in the spark plug hole. Have someone crank the engine until it starts to blow air past your finger. Stop cranking, turn the engine by hand (breaker bar on the harmonic balancer bolt, or put the car in gear and push) until the TDC mark on the harmonic balancer lines up with the pointer on the passenger side of the engine. Loose the distributor hold down bolt, remove the clamp, cap and wires, disconnect the wiring harness. Pull the distributor straight up.

The following re-install depends on the engine being lined up as in the previous instructions.
To re-install, turn the distributor rotor to point to #1 cylinder position on the cap. The#1 position is about 11 o'clock if 6 o' clock is the front of the engine. Line the rotor up with it pointing at the #1 spark plug position on the cap and drop it in: you may have to twist the shaft some to get it to engage the oil pump shaft. Then remove the SPOUT connector plug, and use a timing light to set the timing. The SPOUT is the dangling connector on the distributor harness on stangs made prior to 94 and with a computer controlled engine. 10* is stock for most 5.0s' 12*-14* is good for more pep if you are not into NO2 or power adders.

Rotate the crank with the pulley bolt/ratchet until the number one cylinder is at TDC on the compression stroke. You can't just set it at tdc as there are 2 crankshaft rotations for each camshaft rotation; if you set it at tdc at the end of the exhaust/beginning of the intake stroke, you'll be 180 degrees off. You can determine the proper stroke by leaving the passenger side valve cover off and watching the rockers. The exhaust will open and close. As it's closing the intake will open and close. Once it's closed, look down at the balancer and keep rotating clockwise until the pointer is at tdc. That's tdc on the compression stroke. Now, back up til the pointer is at about 10-14 before tdc - that's where you want the ignition timing set. With the pointer at 14 btdc, install the distributor so that the rotor is pointing as closely as possible to the #1 plug wire on the cap. Play with different teeth to try and get the module/wiring harness plug about halfway between t'stat housing on one side and the a/c bracket on the other - that'll give you plenty of adjustment either way. Drop it in, and that should get you close enough to crank it up. Once running and warm, put a timing light on it and set it with the spout out.

By the way, I always install them this way - I never mark them. Once you understand what you're doing, you'll never need to worry about marking one again.