1977 Jeep Wagoneer Possible Misalignment of Camshaft and Cr

I'm working on a '77 Wagoneer with a 360 V8. The previous owner was not too smart. When I tried to install a new distributor and time it, I found that:

1) With #1 at top of compression stroke,
2) The Harmonic balancer mark was at TDC, and
3) The Distributor rotor pointed at #1 wire

To get the engine to run well I have to adjust the timing so that #1 fires 1 stroke before TDC (i.E.) Harmonic balancer mark is 180 degrees before TDS when viewed with a timing light.

What's wrong?
Do I have to rotate the camshaft 90 degrees backwards (CCW) and re-install the timing chain?
Can I leave it like it is and connect the timing light to the wire 2 wires back (CCW)?

I confess that I barely know my way around an engine, and I would be grateful for any help.

oldmancoyote1