Putting the drive back in at TDC shows the angles to be just below or just above the level. Can't put it level.

Assuming I'll live with this, which to live with; just above that line or just below?

It doesn't really matter. Just put the distributor in and make sure it's TDC (or even better about 10 degrees before)on the compression stroke. Make sure you can turn the distributor both ways. (So you can advance or retard the timing.) Whichever terminal on the distributor cap the rotor button is pointing to plug the #1 plug wire into it. Then do the rest of the plug wires in firing order in the direction the distributor turns.

set the crank/timing cover timing marks on the initial amt (ie 10BTDC) you plan to run (#1 compression of course) then index the inter gear (wherever) so it locates the rotor under (or very near under) the #1 dist cap terminal w the dist housing located in factory position where the vac can has room to b turned and if you are locating your plug wires from scratch the factory diagram is best for standardization for future reference and it lets the wires nestle neatly w the shortest route and diff dizzys can have diff top rotor slot to bottom shaft tang orientation and the bottom line is you want the rotor blade as close to dead center on the underside cap terminal as possible when it fires and only vac adv will alter rotor phasing from that point (moves it CW on a BB and CCW on a SB) EDIT forgot, turn dist till the magnet slot is dead even w the nearest reluctor tooth then move the housing (magnet) a hair more past the tooth opposite dist rotation w the rotor under #1

If you have #1 on TDC the slot in the oil pump drive will line up in straight line to the #1 cylinder location. FWIW this should give you plenty of adjustment fore and aft. The other methods will work as well, but make sure you pick a consistent method and stick with it.

Again, the FSM states the slot in gear should be parallel with crankshaft when installed properly at TDC compression stroke, looks like your's is as close as it will get.