You are connecting the dwell meter correctly. Are you sure it's good and are you sure you have good connections at pin #3 as well as ground?
When doing the lambda adjustment, you are looking for 50% not 35 to 45%. This will be midscale on your dwell meter. Proceed carefully with this adjustment, you can get it so far off, you'll wish you'd never touched it. I have tweaked on mine a number of times to get it right.