Mine had exactly the same problem, except mine had more of that white power which is over yours all through mine. It looked to me like the same crud you would find on the positive terminal of a battery over time.
I always disconnected my battery. After I pulled the distributor to pieces to clean. I stopped switching my battery off, left the cap as it was and the I never saw the corrosion again. I used 240grit wet and dry with a bit of WD40 to clean the reflucter & mag pickup.
I was told it was mixed magnetic reaction with the trigger and the battery being switched off all the time as the negative terminal bolted to the head.
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'71 Holden HQ Monaro - 3850lbs race weight, 400c/i - 11.4 @ 120
'66 Pontiac GTO - 389, 4 speed street cruiser
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