Timing your engine

Remove the timing plug on top of the flywheel housing.
Remove the sparkplugs.
Remove the timing cover.
Remove the idler gear between the oil pump gear and the mag gear.
Remove the idler gear between the cam and the crankshaft.
Use a large wrench and turn the engine sproket nut while in gear so the flywheel rotates. 
Rotate the flywheel around until the letter "E" is visible dead center in the inspection hole.
Exhaust tappets shoud have .008 clearance between the tappet and valve stem cold. Intake valve should be.002 clearance between the rocker and the valve stem.
Now take a wrench and turn the camshaft on the front nut and roll the cam over until the #4 exhaust tappet moves down and just barely releases the valve. You can tell exactly just when it releases as you will be able to start to turn the tappet. So by holding the tappet and trying to turn it while you turn the cam around is an easy way to tell when it releases.
Now put the idler gear back in between the cam and crankshaft.
So what you have now is when the letter E appears in the inspection hole the #4 exhaust valve tappet will just be released.
The valves are now timed and you can start on the magneto side.

Now, roll the flywheel back using the engine sproket (you won't have to go very far) until you see "S" in the middle of the inspection hole and stop there.

Remove the distributor cap off the magneto.
Set the magneto to full advance for KJ, retard for DeLuxe. On the magneto lever, advance is down and retard is up.
Set the magneto distributor brush pointing to the upper right segment which is the terminal for #1 cylinder.
Advance the points closed but ready to open with the slightest advance of the flywheel. Now put the idler gear back in between the oil pump gear and mag gear.

Check your gaps in the points they should be .015 full open but no more than that make sure the points open to no more than .015 in both positions. There are 2 ramps inside that mag housing that open the points. If one ramp is worn more than the other that will effect the firing. You don't want the points to open .015 on one set of ramps then open .025 on the other ramp. the both must be .015

Plug gaps should be .019 to .023

You should be timed.