I thought the same thing, so I tried it in the retard keyway and it moved the ICL to 117.5 degrees, which definitely retarded the cam, but way too far again. That would be +9.5 from the 0 keyway. Looking at the keyway slots closer this evening, I can visibly see both the advance and retard keyways look as though they are right in the middle between teeth on the sprocket. The teeth would be 15 degrees apart, so that would put the keyways roughly 7.5 degrees apart on either side of zero. Everything on this engine has been a battle, I'm sure this wont be the last. I'll talk to Cloyes tomorrow.
Have you used any of the 9-keyway sets out there? I think that may be the magic bullet hopefully.