...I'am looking at the Distributor Gear...I do Not see One Bit of Lubricating Oil!! That Gear should be 'Dripping' with Oil! Not only is the Phosphor Coating gone (normal), the teeth look to be fairly Worn-In. The Cam gear can be expected to be Dry, also.
With No Oil, THAT will make your 'Scruffing'...Chafing Sound. I heard this same Sound before. I performed the operation where you drill a .030" Hole through the Opposing Oil Gallery Plug. This shoots a continuous Stream of Oil Directly onto the Drive Gear Teeth. I have Not heard the sound again, during all these years.
In Normal use, the timing chain is supposed to Splash/Throw Oil up onto the Gear. But, if the Chain is Running DRY, The Drilled Hole Guarantees Lubrication to the Gear!!
Here's a Test you can pull. Pack-Goop-Up the Gear well with Moly-Di Grease, re-install the Distributor, Set the Timing and Fire the Engine Up. If the Sound is GONE for awhile...You have found the Source. You might have just pulled the Damper for Nothing. Did I say First get and Use a Stethoscope!?
MJ