The end of the retaining pin is shaped to fit in a slot in the oil pump driving spindle. I guess the spindle has moved down by the action of the worm drive because the retaining pin has come out of the slot. try turning the engine backward to raise the spindle. You should be able to engage the slot with a small screwdriver first, then install the pin. Ron
There are two lengths of pin for the M20 and another one for C models..(C10 etc.)..Some M20 pins will be flush with the gasket face when fitted all the way in..Others are a little shorter and a special washer is used with this type to take up the extra space..The washer has a 1/4" clearance hole through the middle but the O.D is a snug fit in the crankcase, so it doesn't conform to standard washer dimensions...It can be made by carefully filing down a standard washer to the correct outside diameter...The C model pin is substantially shorter than the M models type and is not the correct part...
You should certainly not run the engine without the cover fitted..In that condition there is no oil feed to either the cam spindles or the big end!...
It's worth noting as well that the thread in the retaining pin is 1/4" Cycle thread, not 1/4" Whitworth..In the BSA worksheets it tells you to use a timing cover screw (1/4" Whit.) to screw into the end of the pin to provide some purchase when removing it....As stated the pin is a 1/4" Cycle Thread internally....Pre war BSAs also used 1/4" Cycle timing cover screws but the retaining pin thread was never altered after the change to Whit. timing cover screws, thus the error in the instructions.... Ian