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Just guessing based on what I've seen in the JY, the intermediate shaft drives the oil pump, and presumably the 700/900 engines with head-mounted distributor lack the distributor drive gear on the I-shaft. Since there is no room for the head-mounted distributor in the 240 chassis, you must install a 240 I-shaft into a 700/900 engine, and use the 240 block-mounted dist.
As another poster indicated, make sure all timing sprockets use the same tooth configuration (square or round). I believe MY1993 saw the introduction of the round toothed sprockets and belt, but not necessarily on ALL engines of that year and later.
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Bob: Son's XC70, my 83 240, 89 745 (V8) and XC60. Also '77 MGB and some old motorcycles
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