When timing the magneto to the engine always Use #4 cylinder (nearest generator) to time off of. The keyhole in the back of the flywheel housing (behind the air bath) is where you will find the timing mark. Use #1 only when you are using a distributor.
Remove #4 spark plug, with a finger over the hole crank the engine until #4 cylinder comes up (air blows your finger off the hole). Now look into the magneto mounting hole, using a long screwdriver hand turn the engine by inserting the screwdriver into the generator fins and moving the blades until marked camshaft gear is between the two marked governor teeth.
Take the magneto to the work bench, put a spark wire in #4 (firing order 1-3-4-2 clockwise) turn the magneto until it thows a spark, turn coupler back 1/4 turn so that it lines up to the drive slots of the governor.
Install magneto. Using a timing light fire up the engine and check timing with the light through the kehole on the flywheel housing. You may have to move the magneto back or forth at the base to bring it in smooth.