OK, The distance between the cam button and the timing cover needs to be shimmed to .001" or as close as you can get. You can buy small shims, you can even use brass or steel washers the same OD as the hole in your timing chain. As long as the cam button stays in place the shims will never go anywhere.
If you have not checked the vertical dimensions of the timing gear and the crank gear you should. In 35 years of building SBC's I have never found them to be closer than .005". To zero drag and distributor timing scatter you need to get that number as close to .001" as possible once you determine where your cam gear is going to be you have to place shims between the crank and the crank gear. If you can't find them I have them made 100 at a time in small .001" .005" increments. It might be overkill as most timing chains have enough slop in them to compensate for some mis-alignment, if you want you engine to run like a top, it does not take that much longer to do it right and it is not real expensive, just time consuming.
Once you get the little bugs worked out you will see how rock solid your timing gets as the ring gear on the cam can vary timing a couple degrees just on .005" slop.