Sounds like the dist might be a tooth off, or one of the Cam PS or the Crank PS is possibly bad out of the box. I would check the dist positon first. I just went through this putting my dist in for the last time (I'm puttin' the new engine in tomorrow). Here is the proceedure for the Gen 1 Vortec:
1. Bring the engine to TDC (Top Dead Center)
A. I remove all the spark plugs and belt to make rotating the engine easier
B. Put a socket on the balancer bolt (5/8") and rotate the engine clockwise. While doing this keep a finger over the #1 spark plug hole and feel for the compression. When you start to feel the compression, line up the balancer timing mark and the notch on the timing cover.
Once these are perfectly aligned the engine should be at TDC. It might make it easier to see if the balancer pulley was removed. Also, if the marks are lined up but you did not feel the compression, you are at TDC on the exhaust stroke (180 degrees off). Rotate the engine once more to your marks.
2. Remove the dist cap and wires. The cap should be marked with the cyl #'s but make sure to mark all wire locations.
3. Unplug the Cam PS at the dist base, loosen the dist hold down and remove the dist.
4. Look at the dist gear for wear. If all good, line up the dimple in the dist gear with the white mark on the dist shaft:
5. If necessary, use a long flatblade screwdriver and adjust the oil pump drive to align with the dist gear
6. Install the dist. With the dist properly installed, the rotor electrode will point to the raised "piont" at the bottom of the dist housing:
The raised "point" should have the #8 on it to signify the timing marks for the 8 cyl engines. If it is off, pull back out and rotate the rotor one tooth in the approiate direction and stab it again. In the pic I also highlighted the foward dist cap screw hole to show how close it is to the intake.
One thing to check also is to remove the rotor and see if there is a number stamped in the reluctor ring. #8 is an 8 cyl dist and #6 is a 6 cyl. Don't ask how I figured that out.
This should get you very close to the proper timing, but still may require slight tweeking to get it perfect (something that should be done by someone with the approiate scanner). When I did my intake gaskets last year, I talked to the dealer about setting it for me. I have a good relation ship with them so he said if the dist was off a tooth, it would be an hour labor. But if it was in correctly and just need to be tweeked, he wouldn't charge me anything. Good Luck.