Guys,
Working on a 394. Distributor has seal under breaker plate and a mystery substance below it. It could be old deteriorated felt? Can anybody shed any light on the nature of this material and where I might get replacement material and a seal? Thanks Pictures below.

 

That is what it looks like to me.

 

That looks like the grease that was put into those distributors when they were first assembled. It eventually hardens and turns crusty looking. The seal keeps it from coming up and getting all over the points, etc. Just clean it out and put some fresh grease in, put the seal back in place and you'll be good for another 40 years.