we started to install a new timing chain on our '90 5.7L. we turned the crank to tdc, checked the distributor rotor(it was pointing towards the #1 plug) and removed the timing cover. the timing dots on the sprockets were both pointing straight up! i thought they should be facing each other? when i rotated the crank again(1 full revolution) the dots lined up but the rotor was now facing the back of the block?? is this correct we never saw this engine run, but feel confident that it did with this orientation.
HELP PLEASE!!

 

It doesn't matter if the dots are both at the top or facing each other. The cam turns at half the speed of the crank. When you rotated the crank one turn you went halfway through the firing order-your rotor is now pointing at #6. Just put it back together the same way you took it apart and you'll be fine. If you reassemble it with the dots oriented the other way you'll have to take the distributor out and turn the rotor half a turn, which makes no difference but requires more work, and you'll have to set the timing again.

 

Right:

Both dots at 12:00 = #1 firing = one of the 2 instances of #1 & #6 TDC during a complete engine cycle

"Dot to dot" = #6 firing = the other instance of #1 & #6 TDC during an engine cycle (exhaust valve closing, intake valve opening) = exactly one crank revolution, and ½ cam revolution, away from #1 firing

Basically, when you do a timing chain, install it "dot-to-dot" (#6 firing), simply because it's easier to see.

If you don't disturb the distributor, then it doesn't matter that it doesn't happen to be at #1 firing. It'll start right up and run just like it did before.