I may have to post several pictures to make this question more clear. 1974 2.0 engine out of car trans disconnected from the engine flywheel still installed.
- here is the problem. Adjusting the valves and have number 1 at top dead center. There is a notch in the flywheel that will line up with the engine case seam at the top back side of the engine case when the engine is at TDC for #1 cylinder.
- the problem is when this notch is lined up the 0 mark on the cooling fan is not lined up with the v shaped cut out groove in the fan housing. Actually it is about 2 fan blades off from where it should be. I know I have the correct 2.0 fan with the 27.5 degree BTDC mark and the 0 notch as well.It appears that the fan is off about 2 blades advanced too much. Is it possible the camshaft gear and crankshaft gear are out of alignment a couple teeth?

The fan and flywheel both bolt to the crankshaft.

You have adjusted valves at tdc by the flywheel notch. That really has nothing to do with the timing marks on the fan. Timing will change with dwell and position of the distributor. Manual and vacuum advance play into the equation too. Not to mention whether the distributor vacuum lines are are disconnected and plugged when checking. Every thing has to work together.

More likely than cam and crank not being aligned (the engine would very shortly implode in this scenario), is the distributor drive gear being a notch off.
Then the rotor would not align with the notch on the distributor at tdc#1

That won't affect the fan versus the flywheel, though.

Both the fan and the flywheel are bolted to the crankshaft. The flywheel directly, the fan by way of the fan hub. You might want to take the fan and hub off the front of the motor so you can make sure that the hub is on the nose of the crank properly.

There should be a "woodruff key" (half-moon shaped thingie) that fits in a slot in the crank nose, and a slot in the hub. If that's not there, the fan might not wind up in the right orientation relative to the crank.

If it's there, and the thing doesn't line up, then you a pretty bad case of offset fan. Evidently the mold that the fan was cast in was not always lined up exactly, so some fans are off a bit. You can see two slightly different ones on the Pelican timing article.

If the fan is off, you can re-mark it so it lines up with the flywheel, or just use the flywheel marks.

--DD

What Dave said is correct. I would only add that you can remove the spark plug and see actual TDC and see which marks are correct. I suspect the flywheel is the correct one

Many fans are missing a mark at TDC (ZERO) and have one at 5 degrees BTDC for setting the static timing.

I had to make a TDC mark myself on my last fan.