I dropped my distributor in last night and it seems to bottom out on the oil pump shaft before it touched the intake manifold. The distributor is being held about 1/16th above the seat on the intake manifold. I appears to be meshed properly etc.. I assume I need to install shims between the bottom of the distributor and the intake but
I'm wondering how to determine the proper amount. I'm sure there needs to be some clearance between the pump shaft and the distributor shaft.
HELP!!! :(

There shouldn't be that much space, although some cars do have a fiber washer in between the distributor and the intake manifold. My Nova had one on it. If you use this washer, put grease on it first so it doesn't tear when you rotate the dsitributor.

you sure it dropped all the way in? if it doesn't drop all the way down in the slot that drives the dist. it will stick up like that. pull it out, and look which way the slot is oriented. try to drop it in a couple times rotated slightly one direction or the other. the gears will mesh in any postion, but the drive slot has to line up too for it to work.

Unless you decked your block, and/or surfaced your heads pretty severely, I'm guessing the distributor drive hasn't engaged the slot on the oil pump drive. Leave it where it is and crank the motor over one revolution with a socket on the balancer retention bolt. It will find the slot in the oil pump drive and drop down the rest of the way.

I spoke with my engine builder, Kirk Westberg , and he said this is not that unusual. We will install fiber gaskets & or metal shims as needed to obtain 30 thousands tolerance.