I took of the balancer yesterday, cleaned it up a little more, oiled it again and one more time installed. Same result. I stopped when the tension on the nut on the installation tool was tight. Looks like it is the right way. Also I realized that there should be a little bit of a flange left on the balancer over the timing indicator for the timing adjustment. So I'm good. The reason why I'm asking so many questions and being so cautious is that this engine I'm assembling by myself and really don't want to screw up anything. Prior two engines we put together with my friend, so a lot of little details skipped my attention, also the engines were both v8, 305s, so they were a little different from this one.