I am building a kit car with the 3.5 v8 from a Discovery 1, with a MegaSquirt system (so the distributor is only used to drive the oil pump and doesn't have the cap on). I did a full rebuild and after finishing the new wiring loom, managed to get the engine to run for about 30 seconds.
Long story short, I eventually discovered it was a lubrication issue. WD40 into the cylinders, fuel pump relay removed and the engine cranks. However, I noticed that the distributor rotation was erratic - it would turn 1/8 turn, then the shaft moved outwards slightly, then in, then nothing, then a bit more turn.. very strange.
I took the distributor out and noticed that there was about a 1mm vertical play in the shaft through the housing:

You may also be able to see the gear was slightly worn. I took the timing cover off and the teeth on the drive gear seem to be pretty stripped:

So, the question is: Is this a cause of the lubrication problem? Or would it be the consequence of the lubrication problem? I'm happy to buy another drive gear but I don't want to fit it just to have it destroyed the same way. I've also ordered an interim timing cover and water pump, but was hoping that upgrade was a way away since it requires the crankshaft to be removed and engineered to fit a larger woodruff key (so I've read).
Thanks,
Kev.