The 305 times just like any other Chevy V8. If it isn't pointing to number one on top dead center it is out of time and your power will just fade away Same on most engines.
Yes
WHEN INSTALING THE DISTRIBUTOR THE ROTARY BUTTON HAS TO BE POINTING AT THE NUMBER 1 CYLINDER AT TDC
It is when the number one cylinder has reached top dead center on the compression stroke.
That would be the top of the compression stroke on the number one cylinder.
The TDC is when the number one cylinder is at the top or top dead center of the compression.
yes it does need to be facing towards it
No compression could mean a blown head gasket, cracked head or cylinder.
Presumably we are talking 4 stroke? If so, none or the exhaust - it will be at the top of the compression or the exhaust stroke
TDC on the compression stroke for number one cylinder, looking from the front, the rotor should be pointing to the 5:00 o'clock to 5:30 position on the cap.
Check the Piston Ring.
Remove number one spark plug and squirt some motor oil into the cylinder. Now do another compression test. If the compression goes up considerably in number one cylinder you probably have bad/worn or cracked piston rings. If the compression doesn't change much you probably have burned or bent valves.
Remove the spark plug for each cylinder and screw a compression tester in it's place. Crank the engine around a few times and record the highest number achieved.