I believe something is suspicious with the names. The William Hege listed by the McQueen family is the same as your ancestor. It has William's wife as Susan A. and three children, Lora W, Milton T, and Alex J.
The 1880 census is incorrect, but in the 1900 census for William Hage in Blue River, Johnson County, IN, it says his father was born in NC, which is a match for being the son of Timothy.