360 hesitation and

Hang on,we're not that far yet!
Firstly, idle-timing, at this point, is almost irrelevant. It's the power-timing you HAVE to be concerned with. I can't stress this enough. Shortly,you are going to be making this engine work pretty hard and the power-timing better not be too much! I get the impression that you are new to this field, so please don't take this the wrong way, especially not in a condescending way, BUT if your power timing is too much, it doesn't take very long to damage the engine. Not everybody knows what detonation sounds like or feels like or maybe you can't even hear it over the exhaust/intake roar. So you have to get this done first.
So once again;with the Vcan defeated, rev it up to 4000 with the timing light installed and read the timing. If your light is not a dial back-type, then you will HAVE to install a timing tape. And you can synchronize your TDCs at this time. If the timing is not in the range of 32 to 34*, at this time, Make it so. For instance, if it is at 40, you know you have 7* to much plus/minus 1 . Return the engine to idle, and check the idle timing,then subtract 7 from whatever shows up there. Then rev it back up to 4000 to prove you did a good job.
I selected 34* for two reasons; #1) we don't know that your balancer TDC is synchronized with the actual Piston TDC, and #2) 34* is a reasonably safe number.I highly recommend you synchronize those two before any 3rd gear blasts.

After that;
and assuming you don't have an AFR gauge on it;
Take it for a long ride, maybe 30/40 minutes, get to know your combo. Try various throttle settings and from various rpms. Try not to hit the gas hard enough for the trans kick down ...............................ALL the time,lol.
If the backfire is gone,
How is it responding to load now?
Any missfires under load,in second gear? Either Just on the primaries,or at Wot?
Does WOT power go flat,or nose drop after say 4000, in second gear? With 3.23s that would be 65mph.
Any surging while cruising? if yes at what mph? or thru what mph range?
Any back-firing on closed-throttle deceleration?
At WOT;Does it ever lose power to the point of making a racket in the headers or air-cleaner.