Lost power while driving, P0340 error

The cam sensor is in the distributor I will get you the trouble tree.

P0340 - Camshaft Position Sensor Circuit Malfunction

That code isn't real descriptive.

When you have an engine problem we really need to know which engine you have. On those that use a distributor, that's where you'll find the camshaft position sensor. That's why there's so many wires plugged into it.

You also didn't say the order these things happened. Did you lose power before or after the distributor was replaced? If it was before, the problem may be solved with the new distributor. If it was after, it is likely related to the new distributor, but why was it replaced? Camshaft position sensors and crankshaft position sensors often fail by becoming intermittent, especially when the engine gets hot, and they'll work again after they cool down.

The cam sensor synchronizes the timing of the injectors. Some engines stall when it fails. Some go into backup strategy where the injectors fire based on the crankshaft position sensor. The timing isn't right but at least they deliver some fuel to the engine.

Distributor is a week old. I reached behind the block and unplugged something and it was full of water. I'm not sure what it was- but, I let it dry overnight and this morning she started with no error light after I reattached the plug.
The plug had wires from the injection sensors and they bundle together before reaching the plug. It seems like it is just that though: a plug, no sensor attached. Just wires going to wires.

Sorry about the confusion. The car had died sitting at an idle a week ago. I replaced the distributor and everything was fine. Drove home a few hundred miles the next day.

Later that week I changed the timing belt and water pump. I drove it probably 50 miles with no problems and she was purring like a kitten.

Saturday, in a rain storm, I lost power and the service engine light came on simultaneously.

Dandy. Check that plug for an o-ring or rubber weather pack seal that is leaking so water doesn't get in it again. Be sure it's dried good to prevent corrosion on the terminals.

Does that error for that sensor make sense though?

If the sensor got wet or connector took on water or the sensor may have failed.did you look under the distributor cap for water.does the code come right back as soon as you clear it and run the engine?

Distributor is as dry as could be. Now that the truck starts there is no light or code error.

If its running good and the code isn't reseting then I would wait and see if its All cleared up from you drying out that connector.