You need to get a timing light on it to see if the timing is off or not. I wouldnt worry about the distributor markings too much, they are just a general guide. im having the same issue on a 4.3 that im rebuilding, put the distributor in and the rotor moves past the mark.

so next step for you is timing light

 

timing was off 180. THANKS for all ur help

 

So its now running good and the back firing and rough idle is better now?

Ask this cause I did a 97 engine swapp in a 96 but havent got everything hooked up yet.I know that im going to have to dissasemble the front part of the engine cause the valve covers are on the wrong side.