Barry,
Let me try to relay what my findings were in as short a thread as possible. While I had the engine out of the bike during the restoration and after the top end job was completed. I was in search for absolute top dead center so I could reference the flywheel stamping position in relationship to the case notch and determine any error if in fact, there was any. With the use of a piston stop and large radius timing wheel attached to the flywheel I found the case and flywheel marks to be surprisingly accurate. Barry, you're correct - the center of the crank, flywheel marking and case mark do not line up radially in a straight plane. My intension was to first determine the relationship of these two positions by way of absolute TDC and then determine a corresponding sight-line so my reference during timing was acceptable. The markings were surprisingly close. I ended up painting a white line along the tooth of the ring gear in-line with the case mark which illuminates quite well while the engine is running with a timing light.
The picture shows the position of absolute TDC of my flywheel in relationship to the case marking. I painted a white mark in a line between the case mark and flywheel mark along the flywheel face. It gives me a third reference (of sorts) to develop a plane, or general angle of view. In the end this helped me with my angle of view. But we're really splitting hairs here Barry, as long as you position your sight line (eyeball) relatively close to the case and radially the degree of error is very little in my opinion. I'm not sure if I went to the trouble of determing all of this analytically, if I could even make the timing adjustments to that type of precision. It's an Accuracy vs. Precision thing in my mind. It was a fun test to do but my guess would be if we all were within ±3° we may never feel the difference in performance. In order to use a "third" point you MUST know where Absolute Top Dead Center is on your flywheel.
One full tooth spacing on the flywheel should equal about 4° (03°52'15") of angle.