Did you get the wire issues resolved - I can look at those two wires on my 82 if you still need to know where they end up. Shoot me a PM and let me know. Also, as was suggested, try moving the distributor a little more and see if it will start. Sounds like a timing issue. You said you have the rotor pointing toward the block where it is supposed to be, but you also need to make sure the number one cylinder is at top dead center on the compression stroke before you point the rotor there. There are several ways to find top dead center. I think the easiest way to find it on the compression stroke is to remove the number one spark plug and put a cotton ball loosely over the spark plug hole. Turn the crank slowly by hand and the cotton ball will shoot out when you are close to TDC on the compression stroke. Look in the spark plug hole with a light and watch for the piston to reach the high point of its stroke and then place the distributor in and tighten it down, making sure it seats in the oil pump.
Its easy to set the distributor in 180 degrees off (piston at TDC on the exhaust stroke) which makes the engine backfire or surprisingly run, but run very poorly.
