i read some of that trend,,the dist gear you have is for a stock cam and its not the correcxt one for a k5billit cam. some cam mfr's will have the lobe portion as billit and the dist gear portion would be a pressed on cast portion...who was the cam mfr and do you still have the cam card?
you can change the shims under the rotor but you will have to take the gear off and pull the shaft out to see if their is any so the gears on the cam and dist will mesh properly..
Cam manufacturer is The General himself - GM stock magnum roller cam, which came out of a 502 Mag motor originally. These cams were one-piece billet construction, hence the need for the special melonized gear. You will see in all of the GM catalogs that they call for this gear for all of their factory roller cams. I ordered the gear from an eBay seller and installed it on my stock T-bolt 4 dizzy. There is a single thin shim on the bottom between the gear and distributor body. No shims under the e-clip at the top. There is only about .020 clearance between the gear and the bottom of the distributor, so not any room to add an extra shim here. The only way I can see to get the wear pattern higher on the distributor gear would be to machine some material off the collar of the distributor, although I did have a somewhat thick gasket on it. Going to run a thinner gasket with no sealer to see if that gives a better wear pattern.