Yes, that's the timing :)

To set it, with ignition off unplug the two plugs into the idle stabilizer
(small green or black box just forward of coil) and plug them into each
other.  You have to pinch the plugs to disconnect them, one of them is a
nuisance.  Then set up timing light on #1 (right front) cylinder.  There is
a mark on the edge of the crank pulley closest to the case -- line that up
with the midline of the case and you're timed (make sure rpm stays low so
centrifugal advance doesn't start to kick in).  Shut down and reconnect the
idle stabilizer.  Oh yeah -- tighten the distributor clamp bolt.

FYI there is also a more circular mark on the next-outer pulley edge --
that's TDC.  The other mark has the 5 degrees ATDC already built in.

david
David Beierl - Providence, RI
  http://pws.prserv.net/synergy/Vanagon/
'84 Westy "Dutiful Passage"
'85 GL "Poor Relation"