Dizzy should drop in without a lot of effort, once the gear teeth are lined up. Sounds to me like its not completely seated, like mentioned above, or the o-ring is the wrong size.
Engine shut-off: since your diz isn't in just right, I think it's messing with your oil pressure. Drop in pressure can trigger a kill switch.
And its a FI GT 40. Built on a 351W block, right?