Question of ethics (or probability)

I had my 99 GMC tested for a problem I couldn't identify - so scanning the engine and so forth was the best start. It's got the 5.7L engine, 4x4, auto trans. They initially tested it and said the distributor was off by 1 tooth. So, they corrected that, and reset the timing with their "Modus" computer. Took the truck for a spin - no problems. When I took the truck and drove it for 20 minutes, the same problem came back. It wouldn't go over 2200RPM without severe hesitation and backfiring. Brought it back to them right away, and they tested fuel pressure and volume of pump. Fuel pressure was right around 60, but they said that the volume of the pump was bad (it didn't pass the volume test according to specs). They wanted $600 to replace the pump.

Long story short - I replaced the pump, tank, and hoses. Took truck for a spin and it popped, and stopped running all together. I pulled the distributor, and the teeth were paper thin, along with a few missing teeth. There is the problem.

Needless to say I replaced the gear (along with the oil pan and a new oil pump) - and it now runs great.

NOW - if they moved the distributor 1 tooth, wouldn't they have seen the gear was extremely worn out?

My questions are:

1: do you have to fully remove the distributor in order to change the gear location, or is there a way to only slightly pull the distributor to make it line up with the oil pump line up with the distributor?

2: is there a legitimate "fuel volume test"? The pressure was between 62 and 64 when I tested it...but for some reason believe him about the volume...

This place soaked me for $300 after all said and done, and I wound up repairing the vehicle myself. Do I call shenanigans or is it possible that they are telling me the truth?

Sounds like just plain misdiagnosis, they should have know the propensity for the dist gears wearing especially with the info on the scanner showing the cam/crank synch out, they assumed 1 tooth( how would this happen unless someone had it out) which could be corrected without complete removal of the dist. Volume test on the pump is rarely done these days as the engines performance and a pressure test would point to or eliminate the fp.. I would take your bills and the old parts and sit down with the shop SM and have a nice talk with him and ask for a refund for what we in the business call " ineffective/misdiagnosed repairs"