Ok, I know how to use a timing light and set the timing. But why does my car run perfect when it is WAY off from the timing mark (we're talking 3 inches away when the light flashes) and runs like crap when set with in the area of the timing marker?

 

There are two or three different types of harmonic balancers and timing marks. There is 12 o'clock and 3 o'clock. If the keyway slot and timing mark on the balancer are almost aligned with each other then you need a "normal" pre-87ish 3 o'clock postion timing marker. If the keyway slot and timing mark are about 40 degree apart then you need an 87+ timing tab with zero straight up. If one is wrong you can see that you'll be around 30-40 degrees off from where you think you are.

 

Thanks that would make sense, I have no idea who built this engine but I am on a quest to know exactly what every part is that I have.

 

Are you disconnecting the EST wire first ?

 

Yes I am disconnecting the EST wire first, but when I set it to where it lines up with the marker and I reconnect the wire it stays there only until I turn the car off. When I start it back up it is back to where it was set originally.

 

That doesn't make any sense.
You set the initial with the EST unplugged. When you plug the EST in, then the ECM will add a lot of timing - should be immediate.
When you unplug the EST again you should see your initial timing right where you just set it.

Are you sure you have the correct wire? and are following the procedure correctly?