Oil in my Distributor..?

Not probable , oil drains down . If you have oil in your dist it is junk,. better change it out. Put in a HEI dist this time they are cheap. $25 every junk yard. HEI are excellent igns,much better than stock. Any v8 dist sh;ould work. Be sure you run a NEW wire 10 ga. to the new dist, the stock wire has a special hi resistance wire running to it.. The best racer way is to run your shortened stock dist wire to a HD relay and then run a full 12v from it to thje coil. A any good mechanic (on chev/GM )will know this, this way you avoid any volt loss from your ing. switch.