Timing Issue

[Xoloski]

I am working on a 1993 Suzuki Sidekick JX 4-door with a 1.6 - 16 valve engine and manual transmission. When I got this it did not run. I repaired the wallowed out crankshaft key slot with loctite products. Setting up the timing, I;
1) Aligned camshaft gear timing mark “E” at 12:00 position with cylinder 4 at TDC as determined by cam lobes being at the heel of the cam.  
2) Adjusted the valves.
3) Set #1 cylinder to TDC as determined by cam lobes being at the heel of the cam and the crankshaft timing mark at 8 degrees BTDC.
3) Place the distributer into the housing so the rotor is aligned with the number 1 location of the distributor cap, the rotor points to the right side of the distributor adjustment slot.

The engine runs but the crankshaft timing mark, with the advance lock jumper shunt in place, when viewed with a timing light is approximately two inches advanced. The timing does not change with the shunt removed.
I tried to move the distributor one tooth in either direction with no success.

Once the engine heats up, the timing mark moves to 1 inch advanced with the distributor rotated to the extreme. The timing light pick-up placed on cylinder 1. Placing the timing light on other cylinders does not produce a visible timing mark while running. 

I know that, mechanically the timing marks and belt is setup properly. The engine runs.  
I tried the distributor in all three rotor positions, only 1 position works. 
I even replaced the electrolytic capacitors in the ECU and tested for ground continuity. 

What am I missing?

Does the crankshaft position sensor for this '93 - 16 Valve engine correlate to a pick-up located on the flywheel? If so, then perhaps the flywheel is misaligned. I looked and can not find where the crankshaft position sensor is supposed to be in a '93. The factory manual on page 6A1-51 states, with regard to flywheel installation "Flywheel to Crankshaft, Align the flywheel to engine marks."