If you really want to check the distributor, send it to me, I will spin it up on my machine and set it how you want. I don't like the idea of setting the initial timing at 16* or 18*, you should have 5-8 initial and the rest in mechanical advance, then add a vacuum on top of that. You should also try and have all the mechanical in by 2500 or so, so when on the highway at cruising speeds you are at maximum timing. This should give the best fuel mileage.
Go buy you a heavy duty push / pull cable and mount it under the dash. Hook the other end up to the distributor with some sort of temporary pull arm so when you pull the cable knob out, the distributor advances. Leave the hold bolt just loose enough for the cable to work. Get out on the highway and start advancing the timing to you feel it's not helping then back off and see how it runs for a while. This will save countless test drives while closing in on optional timing locations.
You should never have to run premium fuel with the compression you have, it's costly and any fuel mileage gains will be offset by the price of the fuel. My 8.0-1 compression 250 will run on 87 octane with as much timing as want, I believe it set for 38* total, could be higher, I haven't checked it for years.
