Got a big problem with a '65 GT

[Veloxity]

With excessive wear, timing chains stretch, skip, etc. Just adjusting the distributor may not show evidence of a timing chain problem.

On the older stangs, the balancer has some sort of a paper shock absorber between the inner and outer rings of the balancer. The outer ring CAN slip, which moves the timing marks off. Best way to make sure of the mark, is to get a false spark plug, or a long bolt with the same thread installed into CYL #1, and slowly ratchet the motor till it butts up against the bolt near TDC, then mark the balancer, then ratchet it backward, reversing the process and mark it just before BDC then scratch yer timing mark exactly between the 2.

Definately sounds like the timing chain tho.

Hope that helps!