The Distributor isn't that much of a problem.
If you are able to time it, and get a decent advance, it'll work.
Many people run points on the CU because they had probs with the electronic, usually caused by the idle stabilizer which has helped kill many engines of the unwary and uneducated.
If it has been built as a CU, has it also been rebuilt with hydraulic tappets?
Until they fill, if the engine has been recently rebuilt it will backfire and bugger about. A quick test is to drop a rocker cover and see if you can get any of the tappets to pull away from the valve.
The other thing to look at, if it is hydraulic, and it is dead common.
People don't understand the difference between sprung and unsprung clearance when setting the valves. So, Get the cylinder you want to check up to TDC. Back the tappet off until there is a clear, unspringy gap between the valve and tappet. You may be able to pull the rocker back further, but that is sprung clearance, you are looking for free movement.
Tighten the tappet to remove free movement then 1 and 1/2 turns in.
I've see npeople remove all the sprung clearance and when the tappet fills, the valves are hitting the pistons!
All water boxers were electronic, in fact, all T25s were. (except the diesels for the clever b's amongst you
New rocker gaskets!
Rocker cover trick..... Loop a cloth around the clip on the T4 engine. Hold the cover on and pull like buggery. You should get the clp up without disturbing the gasket.
