I searched on here and found the msd website on how to check it. Either I couldn't quite grasp it or it was a little vague.
Using a stock electronic distributor, I drilled a decent size hole behind #1 terminal, Hooked the timing light up to #1 plug wire, shined the light through the hole while holding the rpm's around 3k rpm. The rotor was 1/4" to the right of the terminal, between #1 and #8 terminal.
Using the adv. function of the timing light, I set it to 36 (what the timing is set to at 3000rpm, so if I look at the timing marks on crank it shows TDC) the rotor goes to approx 1/2" to the right between #1 and #8. It is even farther away from #1.
To me, this looks bad. How do I fix this, oblong the holes that hold the ignition pick-up? Which way would I have to go?

Thanks guys.