318 mystery problem, somewhat solved!

So I should set the initial timing lower then? I'll try that and see how it goes as it didn't like anything lower than that, should I raise the idle, which is at 750 right now, and make it richer? The problem is that it runs so rich if I don't have it really lean, 14.7 is stoic (equal amount of fuel and air going in) and I'm at 15.1 (leaner).
Could running it so lean cause bad mileage?