Won't the dizzy turn independent of the vacuum advance? Loosen the screw that clamps the vacuum advance to the dizzy and it should turn easy. If it starts and idles, then put a vacuum gauge on it and adjust the timing with the gauge. Advance to max vacuum and then back off a bit. Drive it and see if it "pings". If it pings the retard just a bit and drive it some more. Under moderate load no pinging. Under a big load you might get some pinging, not a lot but some. That would be about right. Then put on the light and see what you have. A 261 should have a lot of torque compared to a 216 any way.
