PUZZLER!!! My new motors a dog! what did I miss?

The 12 to 12 should work as well if done accurately (using a straight edge). (Turn an engine over one full rotation after aligning the dots at 6 and 12; the dots will be at 12 and 12.) The 12 to 12 seems to have more possibility for error. Dot-to-dot can get off if you don't use a straight edge.

The cylinder pressures are fair to middlin'; SCR should be in the low to mid 9 range with this piston/head combo. I would expect maybe 150-160 psi? Being low could mean a later intake closing.... could be from a cam retarded 1 tooth. Proper degreeing should catch that but it sounds like the OP is not confident. Did you have the heads off when degreeing so you could check TDC with an indicator? Did you use a dial indicator?

And did the shop know that the crank key does not align up with dot on the crank sprocket? Just checking everything.... a lot of timing problems have shown up suddenly.

That 262 should run pretty lively. Vaccum is good; makes sense with the good idle.

How were the pushrod lengths determined? Block decked or heads shaved? Anything plugging up the exhaust system? Full dual exhausts? Manifold types?

The lack of revving beyond 4500 indicates something plugged or the valvetrain falling apart. Waht valve springs are being used and what closed valve spring height?