A dinged up cam keyway can cause issues. I don't think timing would be that far out at this point. Definately something that has to be addressed.
Putting a balancer on with an impact isn't a bad thing. However if you sit the balancer on the crank w/o rotating it and pushing to seat it on the keyway, that's when you screw up the keyway/balancer if you torque it. I've seen people do this with and without impact. Not sure why they wouldn't line it up, it has a groove and the crank has a key to fit in that groove.
