Quote
...the timing at the distributor may have been set while the belt was off a tooth by the old owner. Could this cause these symptoms?


Absolutely reset the distributor! It's driven off the back of the cam, so it's sensitive to changes in cam timing.

Quote
...maybe the balancer is failing and the outer ring is spinning a bit around the rubber core?


Very possible...

If I were in your situation, I would mechanically set cyl 4 at TDC and check the marks on the balancer.


C/YA!
Jeff
'88 Trooper
2DR LWB 4ZE1 5SP
bone stock DD