Ozone from the spark will accelerate the cave-like rust. I've heard of folks rebuilding them. Maybe a good cleaning, greasing, and inspection is all that is necessary?
I don't see the advantage to HEI once you get confident with tuning points, and cleaning plugs. I'm not an expert on swapping the gear, but especially after having modified the pinon-gear with a hammer or press, for the second (?) time, it isn't quite the same? You could also start with a fresh pinon gear, from a worn-out-Toyota distributor?
I'm confident that the mechanical advance in Toyota distributors, is correct for F/2F. Not that gasoline burns any slower in a LC engine, but, something like a Chevy 250 can spin (redline) with more rpm than these long-stroke Toyota motors, so HEI needs a wider range of mechanical advance. Perhaps, the LC's spark-timing is different than GMs, at a given rpm, because of its longer piston-stroke, but, again gasoline burns at the same rate, given a similar 'atomization' of fuel? Where spark advance is especially needed is on cold engines, or when you are running EGR.