What engine are you working on?
BII 2.9l?
You should be able to put a spark plug, or compression gauge, into one cylinder's spark plug hole, and assuming other spark plugs are removed, feel when compression strokes starts on that cylinder by resistance when manually rotating the crank, clockwise(for most engines), if you go counter clockwise there would be no compression stroke.
There is only 1 TDC mark on crank, that is when #1 piston is at TDC, top dead center, the Valve Timing(cam position) decides if that is #1 TDC compression stroke or #1 TDC Exhaust stroke, but TDC mark will be at the same position for both, there is no 12:00/6:00 positions.
4-stroke engine means each complete cycle of a cylinder requires 4 strokes of the piston, intake(down stroke), compression(up stroke), one full rotation of crank has now occurred, power(down stroke), exhaust(up stroke), 2nd full rotation of crank is complete, cylinder has completed one cycle.
Cam only rotates one full turn for each 4 strokes, if you look at a time belt or timing chain you will see the crank gear will have 15 teeth and cam gear 30, or 10 teeth and 20, or 20 teeth and 40, so crank turns 2 times for 1 full cam rotation.
The rotor in distributor is running off the cam, and distributor must be timed for the cam position not crank position, BUT(big but).......
Assuming timing chain has not been changed/altered you can use the TDC mark to time distributor.
As you have surmised you do need to find when compression stroke for #1 is occurring, OR, you can just time it one way and if it doesn't start change it, it is a 50/50 shot and won't hurt anything.
Put Crank so TDC mark is at 0 deg
Pull out distributor and put it back in so rotor will be pointed at #1 spark plug wire, rotor will move as you lower distributor, so allow for that movement
Snug up distributor
Follow this firing order for 2.9l(half way down the page):
http://www.therangerstation.com/tech_library/2_9_Page.shtml
Try to start engine, if it fires up, you guessed right, remove SPOUT connector and fine tune spark timing.
If it doesn't start, pull off distributor cap and mark the exact location of the rotor, you can "bump" starter motor so rotor is point at something.
Now pull out distributor and rotate rotor 180deg, from where it was before, opposite direction exactly.
Snug it up, put on cap and it will start now.