Yes, it is possible to get a distinction with TMAs and exam scores less than 85%. Once the exam is complete, the exam board look at the range of scores achieved, and depending on the performance of the students, the grade boundaries can be lowered (but they are never raised).
The reason for this is that the exam cannot be guaranteed to be of the same difficulty each year. So, if less than the expected number of students score >85%, the exam is presumed to have been difficult, and the grade boundaries are likely to be lowered.
For my electromagnetism course, I received a distinction for a TMA score of 90% and an exam score of 76%.