There are a couple of reasons why the timing may be bouncing around, in addition to what George mentions, and since the advance is just about where it should be 12 to 38 degrees, (12 deg advanced timing should be perfect) I would look closely at the distributor camshaft and lower advance mechanism plate fixing point. If you have an aluminum dist w/vacuumm mechanism, the swege between the camshaft and the lower advance mechanism may have loosened up. This is a common problem with the post-cast iron dist. Cheap Bosch stuff. You can check this by removing the upper breaker plate and looking down at the centrifugal flyweights. Put a screwdriver down onto the lower plate to hold it and try to spin the camshaft. If there's any detectable movement, this would be your problem. To fix it, you need to pull the felt wick out of the top of the camshaft and take out a circlip, then lift the assembly out. You should also take the spring off first and see if they are streched. They should have one loose and the other in tension (two diff springs) Anyway, you can take a prick punch and re-swege the shaft back on or use a bit of JB weld. most often this will mean a new dist.
Also look at the drive gear below the dist that comes off the cam to see if it is cracked or worn. It is also very common to have this gear crack and the car will actually run, but will have the timing jump around. Make sure that you mark the position before you remove the gear.
The seats look much better. You may want to keep your eyes out for a pair of late model GL/Turbo leather seats. They fit really nice and are far more comfortable than 140 seats. All the adjustments work, incl up-down seat height, if you use the 140 seat mounting rails onto the 240 seat bottom frame.
Good luck with it!
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'89 245 Sportwagon, '04 V70 2.5T Sportwagon