That oil spray is most likely the intake manifold gasket. If it isn't sealing correctly it will create a vacuum leak and will also suck oil into the intake tract which would definitely contribute to your fuel economy issues (also cause a loss in power and consume oil).
It should take you just a few minutes to redo your timing curve with that E-curve distributor; MUCH easier than the stock one that uses mechanical weights and springs that you have to fool around with, lots of trial and error. Take a look at the instructions on the MSD site, seems pretty straightforward as long as you have an accurate timing light and timing tape.