Ed Mayo an early 911 expert with the Porsche Club of America added these additional tips.

"You probably could also use some of the early 2 liter distributors, which will physically fit in the engine. Their curves tend to be a little quicker off idle, then level out and rise again but not as much total advance as the T. They tended to have some advance at idle and less at the end, probably for the longer duration cams those early engines used. The 2.0 liter S is even more radical in this regard. I would suggest not use the S.
 
I might add a new warning due to a recent problem on a customer’s engine.
It seems the phenolic spacer at the gear drive end broke, 
causing significant vertical play in the shaft. 
This play caused the drive gear on the crank to wear out. 
That required a complete engine tear down. 
Be sure that the vertical play is only about 10 to 20 thousandths.
I have not seen a spec published on this. Also installation of a 
Pertronix Ignitor would help reduce the effects of a slightly worn shaft."

Part numbers to look for:

0 231 121 006 -’65 -‘67 except for the S

0 231 159 001 -‘67 2.0 L and T

0 231 159 002 -‘67 2.0 S (VERY different curve)

0 231 169 001 -‘68 2.0
0 231 159 006 -’69 -’71 2.0/2.2E

0 231 159 007 -’69 -’71 2.0/2.2S

0 231 159 008 -’70 -’71 2.0/2.2T

You can also use a distributor from a 2.7 engine. You will notice these will have the hold down clamp cast into the body. 

See Figure 2.

The kicker with this option is that the body is larger on these distributors and needs to be turned down. Any good machine shop can do this work. The cost for this work is about $60.00 US. So like all things Porsche you can always find a fix it’s just where you want to put your money.

Now for costs of used. I was looking at EBAY and found these examples.

0 231 169 001 $110.00

0.231.184.001 starting bid was $49.00 but did not sell.

0 231 159 006 $85.00

So in closing, if you add up the costs of a used distributor in poor condition and the cost to rebuild it the seemingly high cost of a new distributor doesn't seem to be that far out of line.

This information here is provided only as a guide and is accurate, as I understand it to be.

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