Car is a 1966 mustang with a 289 engine. I pulled the distributor to move it one notch to allow more timing adjustment.

Had trouble getting the distributor back in the engine in a position where the motor would start. Finally got the motor started but when I went to set the timing the mark was way off. When I moved the distributor to put the timing to the factory setting the engine stalled. It used to run fine at the factory timing setting. Did I do something wrong when installing the distributor?

 

By "factory setting", do you mean the aligning the TDC mark on the balancer with the timing pointer? If so, that would likely stall the engine. Timing needs to be advanced before TDC, roughly 8-12* at idle depending upon your setup. Also, the vacuum advance needs to be disconnected and plugged while setting timing.