Mike,
Short answer, mechanical advance can move the mark off the scale. Some distributors can have up to 20 degrees mechanical advance,depending upon application.
The hesitation and spark knock could be caused by other things. A lean carb, vac. leak, bad accel.pump , low float level, weak fuel pump come to mind. How do the plugs look? A white/very light gray indicate it is lean.
I dont have a manual in front of me, but I seem to remember that Automatics time at 10 BTDC and Standards at 4 BTDC
