Assuming the timing marks are accurate, and the timing light is accurate, if the timing light shows 0 when connected to #1 or #6 plug wire = initial timing is 0, and therefore correct.
There's multiple positions the distributor can be in, and still have the initial timing correct.
All but one of those positions will look screwy, including looking like someone played Pin-The-Tail-On-The-Distributor. However, it will function just fine if the plug wires are routed accordingly, and don't cross-fire.
SOME distributor housings could affect oil flow if turned too far away from "stock". But the timing would be correct if the timing light shows it to be correct.
Oh, yeah. One more thing. The spark should not ground through the battery, the firewall, or the frame rail. The spark is created by the collapse of the magnetic field in the ignition coil windings. So the high-tension, secondary windings of the coil are both the starting and ending point of the "spark" (voltage surge.) Ideally, the spark grounds from plug, to head, to intake manifold, to distributor housing, to ignition coil. If the circuit is any more involved than that, you're just adding more complexity without any benefit.
"Waste spark" ignitions are even more simple--the spark travels from coil to plug wire, to plug. Across the gap from center electrode to side electrode. To the head, to the companion plug, to the side electrode. Across the gap of the companion plug, to the center electrode, to the plug wire, to the other terminal on the same ignition coil. Which is why they sell "double platinum" plugs, because half the plugs fire from side to center electrode and half fire from center to side electrode; and it's easier to put platinum on both than sell plugs with platinum only on the side electrode, and plugs with platinum only on the center electrode, and then expect people to put the correct plug in the correct cylinder based on ignition coil polarity.