removed distributor and half a gasket fell out
 

Did ford use a gasket between the distributor and the block on the 223?

Short answer is Yes

Whats the long answer?

It was a fairly thin paper type!

There hasn't been one on mine in the past 30 years and haven't had an oil leak problem.

HA:-X03

I think Spuredon , Hiball covered the long Answer. But if you feel the need, the part number would be one of these two choices depending.

https://cimg6.ibsrv.net/gimg/www.for...d3587f724f.jpg

I think the dizzy from the Inline 300 I installed had an "O" ring. Question is what happened to 2nd half of your gasket?

The gear on the cam shaft would have very little trouble taking care of it if it went in but I would sooner think it went out and down the road some place.

That's the likely answer. Need to replace the vacuum advance as well... Once that arrives, I guess I'll pull it again and make a thin gasket for it.

My distributor locked up on me last week. Ordered a rebuilt from autozone. $60 with no core charge. I got it yesterday. Came from Mexico, looks like a brand new unit. It has the o-ring on it like a newer distributor, so no gasket. Hopefully I will get to put it in tomorrow.

Please explain the distributor locking up, that just doesn't seem normal, The older they get the more the bushings wear an increase clearance. If it did lock up the drive gear pin would shear. Can you post a picture of the new one with an Oring?

When it locked up it did shear the pin. It turns out I was tightening the lockdown to tight. With that rubber gasket, it sets the depth also. The gear was actually rubbing the block and pushing upward. The new distributor is actually 1/8 inch shorter on shaft length, also raising the gear. The old distributor shaft comes loose if I pull down on it. If I push up on it will turning it, it locks up. Even if I wasn't too tight, the drive gear cut pushes upward on the shaft as it turns. No pics, I already have it in the truck.
So, in conclusion, I'd measure my distances to make sure you don't waste a distributor like I did.

There seems to be a little confusion. This post was about a 223 distributor and I think you are talking about a Yblock. Thats why I questioned the Oring..

FAA-12143-A .. Distributor Base Gasket / Obsolete

1952/53 215 I-6 / 1954/64 223 I-6.
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B9TF-12143-A .. Distributor Base Gasket-Rubber / Obsolete

1957/59 272 / 1957/64 292.

I ended up tracing the area and making one to fit.