Beater of the Pack has given good advice. It doesn't matter how the distributor is oriented as long as the rotor is lined up with the #1 spark plug wire when the #1 cylinder is at top dead center.
I would orient the distributor so that the distributor is not touching the block and you have enough clearance to rotate the distributor to correctly time the engine.
I'm not really familiar with older small cap HEI setups. Having just checked Rock Auto for ignition parts, it looks like the 1977 292 uses a large cap distributor body but the cap doesn't have an integral coil. If this is the case, it would seem that you might also have some minor wiring changes to do if you don't use the original coil.
