Hi, Chris, bring the #1 piston to the top (i.e. spark-plug-end) of the cyl as you mentioned.
At that point, there's only one way the flywheel can go on and have the timing marks align.
Point the arrow cast into the distributor pulley to the centerline of the crankshaft.
The 3 dots on the flywheel should align up with the arrow on the distributor pulley and at this point the holes in the flywheel should be in alignment with the bolt holes on the flywheel center hub.
Be sure to use red Loctite on the center hub bolts and torque to about 25 ft-lb.
BTW it looks like the timing decal on your 800 should be on the upper cowling support (the one that goes around the flywheel). Later models had the a timing scale and decal on the flywheel. If your decal is gone, you might be able to find a used part on eBay with an intact decal; or perhaps a dlr with old-stock decal, as the part is NLA from Merc.
The part # for the decal is 37-60204.
http://www.dougrussell.com/partscata...1,19 ,1,7,8,2
HTH & G'luck.........ed