Great work with the timing change.
Eliminating the backfire lets the focus on the real problem.
Just a note on the "dead" beat in the exhaust.
Take a strip of soft paper (newspaper etc.)about an inch wide and 8" (not critical) and tape it on top of the exhaust pipe so it hangs down over the open end.
Start the engine and watch the paper for a while.
The exhaust will blow the paper out away from the pipe. The paper will drop when a "bad" cylinder fires.
If the paper just drops on that beat, it is a weak cylinder. If the paper is drops back against the end of the pipe or even sucked into it, It is a totally dead cylinder.
