318 mystery problem, somewhat solved!

Sounds a bit rich to me. You want more like 15:1 at idle, 13:1 WOT and 16:1 cruise.

Does the dist have a vacuum advance unit? Does the FAST system support ignition control, or is it just fuel?

When you say it shifts at 1500 RPM that must be pretty light throttle. If should shift more like 4500 WOT assuming the stock 318 governor.

I think your overheating could be something else, 16/35 is not an especially aggressive timing profile for a stock compression 318. Generally retarded timing will raise engine temps more than advanced.