I'm sorry to essentially ask the same question again but I've double- checked a few things and the mystery remains. The block in my buggy is from a 70 T2 and I'm using the correct distributor for this engine. When I adjusted the valves I made sure that the rotor was coming around to #1, and turned the pulley so that the notch lined up with the crack in the case. From here using the pencil-in-the-spark-plug-hole method I found actual top of the piston stroke to be about an inch to the right of the notch. I made a mark here and used it and a mark I made 180 degrees from it to do my valve adjusting. I just double checked this and my mark still lines up with the highest point in the stroke.
I adjusted the points and statically set the timing to the mark I had made, an inch or so right of the pulley notch. Acceleration was poor, it was popping at idle, etc. I set up the carb using info here: