Do this with the fuel pump removed or before you install it on all models with the fuel pump next to the distributor .  Actually, you can’t have the spacer or pushrod installed to deal with the distributor drive gear.

They flywheel must be installed.

This is the last thing to do when building an engine  but you can do it on an installed engine – usually to correct an improperly installed one . Improper installation may make it impossible to set the timing due to the fact that the condenser or vacuum advance unit may hit the sheet metal  or fuel pump or the oil breather tower on type 4 as you try to rotate the distributor to the right place when setting the timing.

The fist thing to do is make sure the drive gear fits. On type 1 cases, it’s not unusual for the drive gear to not want to “drop in” easily. Too much resistance can cause it to get stuck trying to insert it or remove it (carbon deposits with a used engine). If this does happen, you’ll need some inside circlip  pliers (they spread out instead of in when you squeeze the handle) to pull out the gear. You an use heat to heat the case to expand the bore  – butane or oxy-acetylene (weak) if the gear is being impossible. It won’t hurt anything. Go easy. 100 passes from about 4 inches away. You should be able to pull the gear up easily. Flood with WD-40 even it the engine if full of oil. Use a wide blade screwdriver engaged with the slot to help initiate some rotation and mainly to tell you it’s actually at moving rotationally.  The “special” tool made for this enables one to force the gear out and may damage the brass crank gear although it probably won’t make it unusable.

To prevent the above from happening during initial installation,  before doing anything, make sure the gear goes in easily – spray the bore with WD-40 and insert the gear upside down but don’t let go. If it seems like it’s gonna fall in, it’s perfect. If not, use some fine wet-or-dry sandpaper with the WD-40 and clean up the bore.  You can polish the bearing surfaces (sides) of the drive gear too. Clean with a rag soaked with brake cleaner. Spray bore again and check. If not, rinse and repeat until free. Now it’ll go in real easy.

Now put a little grease on the shim(s)  and  hold them up high on the blade of a longish thinish screwdriver. Insert  the end of the screwdriver into the bore and all the way down to bottom and through the hole at the bottom while holding the shims. When the end of the screwdriver is in the hole in the bottom, drop the shims so they land on the  bottom then mash them flush  against the bottom with the tip of the screwdriver.  Mash them down – the grease will hold them. Swirl the screwdriver around the hole to get them concentric with the hole.

Now, with a pair of inside pliers or a pair of needle nose (you’ll have to push the handles outwards for needle nose) put the gear in. The pliers will allow you to lift it if it’s not cooperating. Use a wide bladed screwdriver engaged in the slot if you feel the need to attempt rotation before it  bottoms. You’ll feel movement between gear teeth.

Where does the gear go?

Engine must be on number one cylinder – valves on number one cylinder in valve adjusting position and the zero mark on the crank pulley lined up with the split in the case.

I told you I’d tell you how to put it in. I didn’t say anything about how to orient it, did I?

Okay, I will. You look at the distributor. Determine where you want the rotor to point and where you want the condenser to be when the distributor is installed and the timing is set. The rotor must point at the mark on the rim of the distributor. Realize, this is just a baseline mark. The rotor may or may not point exactly at this mark when the timing is set but  there must be room to rotate it both clockwise and counter clockwise  1/2 inch or so from this  mark after installation so you’ll have some range of movement so that when you do set the timing, the condenser or vacuum advance unit  won’t prevent you from putting it in that position.  Just look at the thing, take the former into account, look at the orientation of the driven dog on the bottom of the distributor, and orient the drive gear to match then put it in.

See?

Typically, on type 1 applications, this mark, when looking down at the distributor when installed properly, is at about “4 o’clock” and the wide side of the drive gear will be oriented towards the front of the vehicle. If you find the mark not at 4 o’clock  (180 degrees off), that means you either have a type 3 distributor or someone has removed the driven dog from the bottom of the distributor and flipped for their application it  in order to retain the “3 degrees retarded feature”  that VW built into it’s distributors  to help keep number 3 cylinder running cooler. If you find this happening to you, knock out the pin and flip the dog so orientation is corrected.

Another point – cases wear as do distributors. It doesn’t hurt to drop the distributor in  without the o ring but with the  clamp and see if it’s engaging with the drive gear deep enough so it won’t jump up. The problem created by this can be hard to diagnose because every time you stop the engine, the dog and the drive gear will probably re-engage but will jump around while driving and make the thing run real funny. You wanna make sure it’s engaged deeply enough to engage well (pull up on shaft and try to turn. Use calipers or a screwdriver or a piece of welding rod to measure) but not be mashed together with no end play (pull on distributor shaft – it should move a little) which probably won’t happen. If you feel there’s too little engagement you can move the drive gear up by putting in an extra shim in. It won’t hurt anything. Also take into account the end play on the distributor itself. Many are missing the fiber spacers that go between the driven dog and the distributor itself. Often, all are missing giving a few millimeters of play. But realize, even with no shims and a ton of end play, you should have enough engagement  for the vehicle to run reliably. I’ve seen these shims for sale  on the net somewhere if you need some.

Don’t forget the spring that goes in the middle of the top of the drive gear.