[Bruce Edwards]

The gear should just sit on the bottom of the block or just off of it. Most will show a polished surface on the bottom of the gear. It is normal.
Remember the pin is a SHEAR pin. It is not made to hold the gear in place the gear is a press fit on the shaft. That is what should hold it. If the pin shears check the shaft as well as the gear. Some of the aftermarket units are to loose and that cause pin failure.
How many small block Fords running the stock distributor have you seen on the side of the road with a sheared pin?