In an installment of learn from my stupid mistakes:
As I was preparing to install our heads today, I noticed through the hole where the distributor would go that the gear for the distributor drive appears chewed up. If I stick my finger in there, I find gold colored flakes. Nothing that sticks to a magnet.
I saw in this Destroyed my Distributor gear thread where rotating the engine backwards without the distributor installed can damage the distributor drive gear and / or the timing gear on the crank. I have only rotated the engine clockwise (when viewed from the pulley side). With the exception of very minor counter-clockwise rotation to allow deck height measurement or the ability to lift a rod from resting on the case.
In any case, it appears that was enough. Via our friends at Porsche 356 Registry learned that I am now on the path to remove the third piece, clean up that mess, replace the brass gear, and reinstall.
I guess if there is any good news to this is, I found out now, and not after starting the engine.
