1. Dwell is more important than gap, but you gotta trust your dwell meter. Gap is easier to know for sure what is happening, especially if points are new and not pitted. I think that you can get good running over a fair range of gap/dwell -- more important is timing.

2. Possible that condensor was bad on the set that wouldn't work. Flakey condensors can give major headaches.

3. Sounds like you've got the vac retard distributor. That's what's on my 145, but it already had vac retard defeated. Never heard any justification for keeping vac retard feature. Think it had something to do with emmissions at idle and during decell, but can't remember. Believe it was a peculiar idea at the time that lasted several years and then dropped.

4. When your timing is affecting your RPMs, then you gotta turn down the carb idle speed screw. If rpms increase much over idle, then you get the mechanical advance kicking in. Think that's what is happening to you.

Later,
Al