Distributor Alignment

Well you can compare the two distributors and make sure they gave you the right part to begin with. Make sure they are both the same length and have the same position bolt hole. If it is just a drop in distributor, things should be relatively the same. As long as your timing marks are spot on. Some cars the marks can be tricky and you really have to pay attention to them, especially the cam in this case. It should not be hitting any coolant lines and such, that parts correct. Is there a washer or shim on the old distributor that might have to come off and go on the new one to take up that extra space so it is not hitting or resting on anything?

That is a ton of space to be off. It must be missing the cam by a tooth at least if not more. Did you line up the timing marks before you pulled the distributor out? The cam teeth are definitely not lining up. That is for sure. I think I see the problem on this diagram, The distributor is going in backwards. On the diagram you can see the line up is offset to one side. There is a groove on the end of the distributor that needs to line up with the shaft itself. See if this might be the issue.

I just meant that off set of the shaft might have been going in opposite of what it is suppose to. So even lined up at the number one it wont fit in right? Something must be misaligned if you cannot even get the old distributor to go in.
Did you notice the groove on the distributor and its shaft? They need to be lined up as well

So how did the vehicle run before you pulled the distributor out of it? Was there a reason you were replacing it? And from what I am reading here, it seems the slot in the cam should be at twelve o'clock. Do you still have the timing cover off to recheck these timing marks? Somethings not right here.

Yeah I here that, I know how tight it is on those Toyota's. They give you no room for anything. But those marks must be off just enough to cause this, the engine being on TDC could have slipped a little because of it being on the compression stroke. It might help if took that pass side tire off and went threw the wheel well to get to it maybe.

So you did have power going to the distributor I assume? Or are you just going with a guess that the igniter has gone bad? You can check the coil for power and even ground the negative on the coil and get a spark at the plug with a test light. I am just trying to get the whole story here, besides the point that the distributor wont go into the camshaft. I can get a diagram of the igniter and coil circuits to test them, but I supposed we are just at the point of getting that distributor back in there. Do you have the cap off of it? Can you rotate the the rotor to get it to fit into the cam at all,
I noticed when you said you did the tune up two years ago the timing was off, that could be the problem now. If something is going on with one of those cam pulleys or some other timing mark is off for whatever reason. What timing was off two years ago? Was it the rotor you noticed not pointing to the correct plug wire? And how was the engine running before all this? I mean this is a duel overhead cam setup.

Well the computer is going to take care of advancing ignition timing on its own, so if it was reading twenty to thirty advanced and adjusting, that is normal. There is no timing adjustment or setting base timing for that car. I would try putting that distributor in and see what plug wire its pointing too. Line up those marks on the end of the distributor and keep it at TDC and see where it ends up, just do not start it of course.