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No, the timing mark on a pre-'95 auxiliary sprocket doesn't need to be lined up at all. The only thing that matters is that the rotor needs to be pointed directly at the #1 post on the distributor before the engine gets timed.Not sure to be honest, but I don't think that matters at all...if you were running a distributor then that would make a huge difference...
Yeah, I was definitely wrong on that one...Just to save people the confusion: Ford stopped using distributors on the 2.3 in '88, but the auxiliary shaft was kept in use until '94. From '89 to '94, the timing is (relating to the timing belt, that is) controlled by the crankshaft positioning sensor.