Thoughts....
1) make sure the distributor drive gear is firmly engaged with the camshaft gear
2) Make sure the distributor housing and o-ring are sinking low enough to engage the drive gear. I've seen distributor housings that need a little "influence" to engage all the way.
3) make sure the distributor tab is firmly inserted into the drive gear slot. If you pull the distributor and the drive gear is pointing to cylinder 1 firing (both valves fully closed) try dropping the distributor in with the rotor also pointing to cylinder one (you may need to visually inspect with the cap to approximate the correct positioning), and gently wiggling the rotor while pressing the distributor housing down. When its right, you should hardly be able to move the rotor.
4) compare your old distributor and rotor to the new one. Try re-fitting the old one to make sure you're not going crazy
. If the old goes in as expected, then return the msd unit, or find another one to compare it to, but I don't think it's possible incorrectly install a rotor...