are you sure your marks show true tdc?
when you install the dissy - you rotate the engine to see the right timing on the timing cover - you have to check the oil pump alignment in the hole too, then rotate distributor arm so it points to the near the edge of the cup casting of cyl 3 spark plug hole. Once the dissy is put in the arm will rotate itself and point straight in middle to cyl 2 spark plug.
Once set there - you adjust the dwell with a feeler gauge - and verify with a dwellmeter.
Find true tdc first - find a long rod - have a machinist cut threads same as spark plugs on it. you insert this into the no.1 plug hole. Slowly rotate engine till the piston no.1 bumps on the rod. Mark the pulley with some paint. - Now do this again backwards and see where it stops again - mark the pulley again with some paint. - measure the marks and find the center - that point is your true TDC 0 timing point. - Make that mark on the pulley. If its different then your crank pulley is wrong. You have rely on your own new mark now.
The cam timing can be slightly off - I have seen it happen as it requires using a ruler or straight edge as the crank mark has no counter mark to look for - its actual timing mark is the cam pulley itself diagonally across the center of both shafts. Or if you are using a genuine toyota timing chain it will have golden colour links to line up with the marks.
fix the tappet setting - which is easy - at tdc0 cyl1 you adjust the valves counting from front - 1235 - rotate the engine again 360 degrees till you see the crank pulley zero again - now adjust the valves from back of engine 8764.
Pack it up and test again. - Its a pretty simple engine.
p.s. on tappet setting procedure it is usually advised to check the head bolt tension first as it affects the clearance too.