HI, Until someone with more experience replies, I'll chip in. I did my '86 420 about three years ago. Although mine was not noisy, it was worn to the limit and I replaced the tensioner with an OEM part: I got some opinions at the time that the OEM part was superior to the after market parts, etc. In any case, your chain should not be noisy once replaced, and you do not want a faulty tensioner allowing the chain to slap around.
To install the distributor, I barred the engine to TDC cylinder 1 (top of compression stroke) then installed dist. with rotor pointing to #1 plug terminal on cap. I understand the timing is controlled by ignition system from this point on. The indication you mention may be what's expected, I don't remember.Anyway my car has run great ever since, although I don't drive it much, but consider it in semi-retirement. My passenger-side cam cover has a small leak from under one of the bolt heads, just enough to get on the manifold and stink. I am thinking of removing it and applying a little silicone, to see if that stops it. The bolt heads have seal rings underneath; best I remember I replaced these, maybe not. Otherwise if the gasket surfaces are good the covers should not leak. Be sure the gasket is in place under the oil filler cap. Hope this helps some; Happy Motoring!