OK, here is the stupid question, and not to insult.....you have the distributor wires running in a counter-clockwise rotation?
Wild guess, but how did you line up your timing marks on the timing gears? Early engines, like the 421, aligned timing marks with cam gear at 6 o'clock and crank gear at 12 o'clock -so they face each other. The later engines(not sure when they changed over- probably with the 1967 400) had the timing marks with cam gear at 12 o'clock and crank gear at 12 o'clock. Did this once myself and used the early alignment diagram and the best I could get was the popping through the carb and once in a while sounded like it would catch, but never would no matter how I swung the distributor. I did not pull the distributor nor know enough to check #1
cylinder for firing. It was an old beat up/rusty '68 GTO I paid $250 for and I did not know any better back in my youth, so it got parted out and scrapped - I made money on it.
When you pulled your distributor did you re-install it/aligned to its original/earlier position? If you did, you may have lined up your old distributor timing to the later engine timing gear alignment and the 12 o'clock cam gear/12 o'clock crank gear is 180 out and you may find that the engine will fire up if you put the #1
plug wire in the #6
cap position and follow around CCW in the usual firing order.
Second option, and the better, is to pull the distributor and set your #1
cylinder on its compression stroke at TDC. Then reinstall your distributor so the rotor now matches the cap wire for #1
cylinder and follow around CCW in the usual firing order.
Another train of thought is that the distributor is simply off. It does not take much to have the rotor "miss" the mark and not fire. It may seem like the rotor is lined up to fire #1
and your balancer is positioned at 9 degrees BTDC (?), but it may be more off then you might think. So double check this.
Finally, you changed lifters along with the cam. Are you using the non-adjustable torque down method on the rocker arm studs or did you go with polyloks to make the valvetrain adjustable? If you went with polyloks, it is possible that one or more valves are adjusted too tight and not fully closing, thus popping back through the carb.
Lastly, it may indeed be an electrical/MSD problem. You might want to talk to their tech department to see if they have any suggestions. I would do this if you think this to be your problem. Not sure if the LED is supposed to remain on at all times or simply come on initially to let the user know it is operating correctly. If it is supposed to be on at all times, then you could have a problem here and I would get that solved first.