Yes it could be a fuel delivery problem but I think I'd make sure the ignition system was o.k. before I started in on the fuel system. You can check the mechanical advance by again plugging the vacuum line, look at the ball with the timing light, and slowly increase the RPM, you should see the timing advance as RPM goes up. If this is working o.k., I'd dial in more initial advance and try it again. If the mech advance is not working, take the points plate out to gain access to the advance weights and springs, and make sure the springs are still intact, the weights are free to move on the plate and it's not rusted or cruded up somehow.
That knob you mentioned sounds like the grease cup. Just give it a turn every 1000 miles or so to keep lube on the shaft bearing.
