I am sure its been discussed over and over as a problem, but I am hoping somebody has the permanent solution. I have now chewed up 2 gears. I do not believe I have short changed the products or the quality. Have a stock AMC 360, did the FI conversion (carb was RPIA), changed to a HEI.
When I had my 72 Wagoneer (2) and then an 86 Grand Wagoneer, never had an issue like this. Jeep looks great except it tends to spend more time on a flat bed and at shop.
If you have destroyed two distributor gears, you need to give your cam drive gear a good looking at. I just replaced mine. When I put the new engine in back in 2010, I dropped in a new HEI from Jeggs and didn't know or care about the gear mesh, I just installed it and forgot about it. 7000 miles later my timing would not retard when idled down. Pulled the distributor and it's gear was in great shape. But, a look down at the cam gear showed razor sharp edges where the distributor gear had worn them down. I surmise this happened within the engines break in time because I had absolutely no metallic particles in the oil or filter when I pulled the timing cover. In that 7000 miles I have changed the oil twice and didn't think to check for particles in the break in oil. I replaced both gears with an MSD matched set, and they are not cheap and after about 20 engine hours now, no wear can be seen on either gear.
I just went through the something similar and was able to locate the issue. I wouldn't run it anymore until you located the issue. You don't want the metal particles getting pushed into the bearings.
If it was me this is what I would do... Go ahead and order a matched set of gears and a timing cover gasket set. I'd order a timing chain set also if you know the one in it is original with high mileage. Pull the accessories and timing cover and inspect the timing cover for anything unusual. The timing sprocket has a key way notch and an oil passage. Make sure these are installed correctly and the oil passage does not have flashing blocking the path. Check the new sprocket oil passage also. I cleaned the flashing up on mine with a small file before installing. I have read about people using a drill bit to test the hardness of the two gears. I would try this to see if one of the gears is a hardened steel and the other not. Otherwise you're just replacing the gears and hoping it doesn't happen again. I like to find the cause if possible. I have not done the HEI on a V8, but Think you have to get the AMC modified HEI with the correct shaft length and not just run the Chevy HEI like you can in the 258.