No, you can never be off 360 degrees, but you can be off by an amount less than that. Remember, a circle is an arc of 360 degrees in length. Or, there are 360 degrees in a circle. You are off 180 degrees, or half a circle. In an Otto cycle (4 stroke) engine, the piston is at TDC (Top Dead Center) 2 times during each cycle, only one of which is used for producing power. If it were a 2 stroke, it would be on the power stroke every time the piston was at TDC. 2 strokes are not relevant to passenger cars though, unless you have an old Saab, Trabant, or Wartburg-so I will skip the dissertation on how they work. Anyhow, in a 4 stroke engine, if you are 180 degrees out, the ignition is not firing on the power stroke, but on the intake stroke when the intake valve is open to let the new charge enter the chamber, and the piston is on it's down stroke. Basically, the 4 stroke cycle goes like this: Intake ( intake valve open, piston traveling down), Compression ( both valves closed piston traveling upwards), Ignition/power ( piston at TDC, spark plug fires and sends piston downwards), Exhaust ( piston travels up from the bottom, exhaust valve open, and the pressure forces the spent gases out the exhaust port), then it repeats itself. If it is timed to fire at the wrong part of the cycle, it will not produce power since the engine relies on thermal expansion in order to move the piston downwards in a closed cylinder. Remember: the distributor is timed off the camshaft, not the crank. The cam is driven at a 2:1 gear reduction, so it only goes 360 degrees while the crank turns 720 degrees. This is why the cam sprocket/gear has twice the circumference and tooth count as the crank sprocket/gear in a timing set. This is also why the timing mark on the balancer can line up, but the valves will be in the wrong position to make power.
There is an animation here of how it works if you did not understand my explanation. It will make it all crystal clear as to what I mean.
http://en.wikipedia.org/wiki/Four-stroke_engine