I would think that it is just sitting in there funny or something. It seems like on mine it is super close and maybe did interfere a bit. It also seems like my last one busted up and I ran without it (my memory is fried on this one). BUT, I think you should make every effort to leave it in there.

Before you replace a whole distributor and spend a bunch of money on it, you should realize that all the parts in there are testable. If I'm right, you should only have to replace the body if the bearings are fried (happend to me) or if the insulation is all cracked on the wires in there (happedend to me a few years after the bearing problem. Luckily, I kept the body with the fried bearings and swaped out the wiring).

Make sure you are getting voltage to the distributor.