Gas Mileage???

Two different situations being discussed here. One is a near factory stock engine and drivetrain, the other is a hot rodded engine. The first will work best, especially for milage, using the stock specs as a baseline. The hot rodded cases should use the accumulated experience of hot rodders and racers as a baseline.

Y2 - That's not too far off from factory. CarLife Road test for 1969 340 'cuda states 11-14 mpg as normal range. Since you are running everything close to factory spec, use the factory specs as baseline for the ignition timing. Then fiddle with the carb.
Side note on carb: With the total gearing combination some of your highway driving will be low throttle position. So don't think its neccessarily all in the primary jetting (it could even be drawing from 'idle circuit' as Holley's do when coasting at moderate highway speeds). Chrysler Master Tech Conference is as good as any place to start for explanation of Carter carbs. (available on-line at www.imperialclub.org as well as Hammtramck Historical and mymopar)

For the timing curves, look up the factory specs in a '69 FSM. Compare that with the timing on your engine. ALL of it; idle, the entire mechanical advance curve (at least three points), the vacuum advance (at least 3 points). IF the factory used manifold vacuum for the distributor advance, use manifold vac. If it used ported, use ported vacuum. With a factory cam, the actual timing at idle when using manifold vacuum will be idle spec plus vacuum advance. So don't get fooled by a low initial. Go for max advance the engine will tolerate. Today's fuel may result in ping at part throttle. In this case - adjust for less vacuum advance.

Those with mildly hot rodded engines - Cam overlap etc reduces the manifold vac at idle. Using more initial timing compensates for this. As soon as the throttle opens just a bit, manifold vacuum increases. That's why many have found ported vacuum advance plus more initial is better for hotrods. This arrangement is fairly simple to set up and eliminates the question of whether the vacuum advance will be in play at idle.

Adjusting Vacuum Advance Pods - For mopar distributors, the cans with a hex shaped nose usually can be adjusted with an allen key. This alters the vacuum when the advance is added or not. The maximum amount of advance a vacuum pod can add is based on the notch in the arm. A piece of wire or sheet metal can be used to reduce the movement.

If you're willing to do a little work, I think there is some good info in the threads here:
Racing Fuel systems Forum Ignition
especially Too much advance at light throttle?