I've got a bunch of each style K&B 3.5 inboard, as well as a bit of aftermarket parts for the early ones. If you put in the wrong crank, or install the bearing housing in the wrong spot, the timing will be way off on the early crank induction engine. On the later drum rotor engine, as long as the drum housing is installed with the intake facing up towards the piston (inside of case), then you can't miss on the timing.

Since Drmeff is saying that there's no notch, and the crank just presses against the rotor, I think that's where the problem is!
While it's possible that K&B has made a disc rotor version of the 3.5, I've never heard of one... Still with any intake rotor style, it must somehow be indexed to the crank!!