On a 97 toyota tacoma which way should the rotar button sit when number 1 cylinder is at dead center

Most 4 cylinder engines use 1, 3, 4, 2 as a standard firing order. Number 1 cylinder is positioned nearest the belts and pulleys, and cylinder 4 is nearest the transmission. The coil packs are often marked with the numbers 1 to 4 to show which cylinder they are meant to go to.

Basically, #1 piston should be all the way up, with the intake valve past opening and now closed and the exhaust valve just about to start opening. Buy a cheap shop manual to insure you get this correct or you will be very sorry.

Dead cylinder...do a compression test on each cylinder and write the numbers down for each one, you will probably find at least one of them with a zero reading. Then squirt oil in each cylinder and test again. If the pressure tncreases over the first reading it indicates worn rings, if it stays at zero then you probably have burned valves. If you have water in the oil or visa versa, or zero readings in cylinders next to each other...it is a blown head gasket, and or warped head.

The firing order of in-line 4 cylinder engines is the same (for old car models) of Chevy, Olds, Pontiac, Dodge/Plymouth, Datsun/Nissan, Honda, International, Isuzu/LUV, Jeep, Mazda/Courier, Mitsubishi, Opel, Toyota and VW.
"Always check the exact firing order of your engine. It is is generally stamped or cast on the engine's intake manifold, valve cover or cylinder head."
Source: "Tune-up and Electrical Service" page 161 ISBN 1-879110-15-6 published by Do-It-Right Publishing, Inc P.O. Box 839 Newhall, CA 91322-0839

firing order is 1,3,4,2.

Well, I would probably get a second opinion next.
A random miss code is just that, the computer is seeing a loss of power on different cylinders at random times. If cylinder number one had a dead miss you should get a code 301.
It could be something mechanical such as a burnt valve or bad rings, but that is usually on one cylinder.
At least take it somewhere else and have a compression test done.

Coil pack connection is physical: Coil 1 to Cylinder 1, 2->2, etc.

I am not sure if this is your question, but firing order matches spark to TDC (top dead center) on the power stroke. The design of the crankshaft determines this.

1-3-4-2 is common for most straight 4's. Cylinder 1 is closest to the crank pulley. I believe your coils are 'waste spark' which means it will fire two cylinders at the same time. When the coil fires, one cylinder is on the power stroke and is wanting this spark. The other cylinder is on the exhaust stroke at this time, and thus the spark is 'wasted' on that cylinder. But a cylinder with exhaust gas has high impedance, so most of the energy is delivered to the intended cylinder.

If your question was 'should I just connect 1->1, 2->2, 3->3, 4->4' [ yes!] vs. ' should I try to connect coils following the firing order' [no] then the answer is the first. The trigger wheel determines which coilpack fires when, you just need to hook up the wires number for number.

First thing to check is if rotar on distributor is at #1 plug wire when #1 cylinder is at top dead center. This will ensure the timing is set correctly.

Yes,need to make sure crank is at TDC as well

P-0304 indicates number 4 cylinder misfire. Are you using Toyota parts dept spark plugs? More often than not, non-toyota plugs make the v-6s run poor, right out of the box....
Try this:With the engine running, pull the connector wire off of the #4 injector. Note to see if there is any change with the idle quality. No change? You may have a bad injector.