Here's how I did it:
My flywheel (probably off an O-320) has both #1 TDC and 25 deg stamped on the
front of the flywheel. I didn't have to use the case part line at all:
A 1/16" drill bit fits perfectly into the hole on my Sky-Tec starter. Don't let the bit stick out too far or the teeth on the flywheel will break it off. You can't see it in this photo due to parallax, but at #1 TDC, the drill bit is aligned with the center of a tooth. I added a short piece of blue tape along the TDC mark to extend the line down onto the tooth:
I used double-sticky carpet tape and painter's tape to fasten the digital gauge to the prop extension. I just zeroed it out at #1 TDC and could read the mag settings directly:
