Just a couple quick thoughts until I can digest all the new info............
1) 3" of vacuum fluctuation is quite a bit with a fairly mild cam. But, if your gauge is connected to a port that's over a single intake runner, it can happen. Mainly because it's reading pulsations, unlike if it was on the carb base or plenum.
2) If you were trying to spray the top section of the carb for a vacuum leak, chances are the primary side of the air horn was pulling it in, giving a false reading.
3) That's a lot of bounce in the timing. My first thought would be your mechanical springs are too light and the weights are at the opening point a little too early.
Like I said, i'll think on it some, and watch what some others have to say.
