Did the new distributor fit with the gear installed?
If not then you may have a problem with it's matching gear on the camshaft. :-( Guess what you might have to do now???? And before you remove the cover you might want to remove the oil pump gears and see if you can fully seat the distributor.
Is this a new aftermarket timing cover? Maybe it is not aligned perfectly. There is a procedure for aligning the cover but it mostly pertains to the seal and crankshaft sprocket.
Just thinking out loud. later, dave AKA vwdoc1