OK, let's talk timing.
You want to be at or near 36* BTDC with the mechanical advance all in and the vacuum disconnected, which is anywhere above 2500 rpm. You also want the most base timing you can get without knocking. That's the sweet spot for low end power. 16*BTDC is usually safe on a stock 350 with the 76cc heads. It ought to start knocking under lugged conditions (low rpm, foot in it, up a steep hill) between 18 and 22 BTDC, so that's why I say 16* BTDC is usually OK.
If you can get 16* base timing, then 20* mechanical advance is perfect to get to 36* all in. If you can only get 14* base timing, because it starts knocking under load at 16* and you want a couple degrees safety margin, then you would want 22* mechanical. Try to get 16* base timing first. That's your ignition timing at launch, 1500 rpm and full throttle. If you get knocking, back off 2 degrees and try again.
This is why being able to dial in more mechanical advance on performance kits is important. With high-compression pistons and heads, you may only be able to run 12* BTDC base timing, so you need 24* mechanical advance to get to 36* all in. But 24* mechanical advance by itself is not a performance setting. You are better off with the highest base timing you can run and as much mechanical as it takes to get to 36* all in.
Base + mechanical of 36* BTDC is your best timing on all GM V8s in the upper half of the rpm range, 2500 rpm to redline, and full throttle.
Vacuum advance is to compensate for low cylinder pressures at closed throttle positions, such as at idle. Less intake manifold pressure (that is, more vacuum) means less mixture to compress in the cylinder, lower cylinder pressure at ignition, and a slower burn rate of the mixture, so you need to light it sooner. Vacuum advance also adjusts your timing at cruise, when you are above 2500 rpm and at constant speed, like interstate cruising at 70 mph. 44-52* BTDC is a good range. More than 52 is probably too much. Some people like to run low in the range. So lots of variation here. Adjusting vacuum advance for smoothest idle (on manifold vacuum!) is probably your best setting, wherever it is in that range.
If you have 36* BTDC base + mechanical, another 8 to 15 degrees of vacuum advance puts you in the range of 44-52* BTDC at cruise. Note that all of these are in CRANKSHAFT degrees. Vacuum advance for historical reasons is usually specified in CAMSHAFT degrees, where mechanical advance is not. Don't ask me, I didn't make the rules. So 4 to 7.5 camshaft degrees of vacuum advance is in the range. The stock HEI that came on our trucks had the vacuum can set for 7.5 degrees. Adjustable vacuum cans allow you to adjust down from that value, to achieve smoothest idle.
As an example, I am running 16* BTDC with the stock HEI, which gives me 16* BTDC on launch, 36* BTDC above 2500 rpm at full throttle, and 51* BTDC at cruise. The stock HEI works for me with a mostly stock engine, because I get the right numbers per the above discussion. An adjustable vacuum can would probably allow me to smooth out my idle a bit. If I could not get 16* BTDC, I would have to adjust the mechanical advance to get 36* BTDC all in.
Hope that helps.
BTW, there's major wear issues in your distributor if you have bushings worn through and the rotor does not rotate smoothly. Replace all the bearings on the distributor shaft, or replace the distributor.
