Hi Rocky, not sure if his instructions were a little off ..or maybe you mis-heard what he may have mis-said

Start with the engine at TCD ...on the compression stroke. Make sure No 1 inlet and exhaust rockers are loose... or use your thumb the check for compression. The pointer in the flywheel case will point to the TCD mark on the flywheel twice per engine cycle; you need to make sure its at TDC on the compression stroke....
It looks like the dizzie drive (in your photo) is correctly aligned so the rotor arm should be pointing to “one o’clock” (or maybe two) ..but not at No 1 plug. But then it doesn’t really matter where its pointing ..... Which ever plug lead its pointing to IS the No 1 lead.... (where the rotor arm is pointing and hence which is No 1 is determined by the orientation of the dizzie drive). IMHO they only specify a particular direction because it makes for the neatest plug lead layout....
Twist the dizzie so that the points are just at the point of opening.... make sure you’re twisting the right direction and ensure the points lifter is on the opening side of the dizzie cam (not the closing side).
I can never remember which way the arm rotates (I think its anticlockwise).... but, to be sure, stick the car in gear and pull the car towards you a few inches. You will see the rotor arm rotate .. and the points will open.
Push the car back so we’re at TDC with the points juuuust about to open.
Attach the other plug leads in their correct position.... count off anti-clockwise from No 1 in the correct firing order (1,3,4,2).
Whack the dizzie cap back on you should be set to go....
BTW did you switch to negative earth during the rebuild? If you did, you will need to switch the coil wires as your workshop manual will probably tell you to fit them to suit +earth (which your 850 would originally have been)
Cheers, Ian
PS.. Timmy was typing at the same time as I so I didn’t see his response. I would not fiddle with the timing (turning the dizzie while cranking). It should start set at TDC but once the engine is running you can slowly twist the dizzie one way and then the other (only a few degrees). If you start twisting the wrong way the engine will falter (revs drop) so turn it the other way. Revs should increase and then begins to fall as you go past the sweet spot. Twist it back to where revs are at a max. Your timing is now correct.... (at idle).... You will need a special machine and/or a dyno to make sure the advance curve is correct across the rev range. Ian