3rd gear dying

In 3rd gear the engines rpms would be low, and the motor lugging putting it under strain until rpms are built back up. Sounds like it may need a tune-up, plus check the spark out of the coil to make sure it is white in color, not orange in color, this would indicate a week ignition system, points & condenser, cap & rotor, spark plugs, possible spark plug wires, & coil.

I'm still learning about all this so look at my distributor?

I'm restoring the whole thing and from what I can see the block is the newest thing distributor is old and a tune up? Idk what you mean im not dumb but do you mean like rebuilding the whole engine? I know how to do it but also the distributor looks like the original it's old I know how to fix it and put and new one in too

Ok, this will be cool. At this point not sure if the engine would need rebuilding. If you are to check things out to know where you stand with this engine, I can help. If that distributor is original, then chances are it is worn out. You could start by putting a dwell meter on it and see if the dwell holds at 28 to 30°. The cam for opening the points wear out along with the distributor shaft bushings. Before replacing this distributor, if worn out, you may want to consider an HEI distributor for this motor. Major difference in performance. Sounds like the engine basically runs ok, but you should do a compression test to see what you have going on there. I believe compression should be up around 140 lbs. but not below 120 lbs.