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The important relationship is the cam to the crankshaft. Those two marks are the cam to the idler gear. I have no experience with the loop frames, though I suspect they're very similar to the tontis, but more importantly, I have no experience with gears rather than sprockets. Usually, on other machines I've worked on, there's a dot (punch mark) on the teeth that need to align. I'll look in a manual and see what I can find, but I'll bet someone more knowledgeable will be along shortly. As for the distributor, it would be difficult timing the distributor with a timing light when I won't even run. Have to set it initially using the flywheel timing marks. This is what I found doing a little search:The mark on the cam gear will be at 6 o'clock and the mark on the crank gear at 12 o'clock. The oil pump gear has no marks so don't worry about that one
On Loops with gears, there are paint marks only. There is no "idler gear" - his marks are on the cam gear and crank gear. Loops also have no flywheel marks, other than an arrow (unless the flywheel has been replaced with a Tonti one). Timing is set with marks on the crankshaft belt pulley and an arrow cast into the timing cover. You can check timing with a strobe even if the engine isn't running - plugs out so it spins fastest, crank it with the starter, shoot the marks.