I'm still trying to get my ignition timing set up correctly, so at the risk of beating a dead horse, I found this article. I believe it explains exactly what is happening to me.

The article states Quote "In practical terms, the position of the distributor which yields the highest idle speed is within a very few degrees of where it should be set. (If you retard the timing about 5 degrees from this point, you will be awfully close to spot-on."

The writer also states Quote "Timing the ignition, then, is a matter of getting the timing correct at one end (idle or full advance) and letting the rest of the range look after itself."

So, With the idle set at 800 rpm, I will play with the distributor until I get the highest possible Idle speed and then check the timing mark. Then I will retard the timing by 5 degrees. I plan to do this with the Vacuum line connected as this will represent a real life condition.

Ignition Timing Explained/Timing an Unknown Engine

If this works, I will definetly retain the article. I will report findings.