Gas Mileage???

Greetings
Yes your combo is messed up. But not hopeless.
Your vacuum reading is ambiguous on account of there is no frame of reference. It must be accompanied by rpm and timing.
And here is why; Using the same warmed up engine,try this; put the vacuum gauge on it as it sits. read the timing and the rpm. Now advance the timing5*, and re-read the rpm and vacuum. Now retard the timing 10*, and reread the rpm and vacuum.Then put the timing back to the start.
So you see what happened? The vacuum and idle speed may have changed dramatically.
However I got one clue; The dramatic fluctuation from out of gear, to in gear. The biggest contributor to this phenomenon is the T-port synchronization,
See http://www.forabodiesonly.com/mopar/threads/ajs-guide-to-transfer-port-synchronization.
So I played with the Wallace calculator, and here are the results.With your idle-vacuum, and power descriptions, I guessed at at a 276* cam with a 64* ICA. This is a pure guess. I inputed a 4.07 bore x 3.58 stroke, and a stock 6.123 rod. At a Scr(Static Cr) of 11.3, the calculator spit out a Dcr(Dynamic CR) of 9.0 and cylinder pressure of 186psi.There are many other numbers that could spit out the same pressure, so this is not an exact number.
Now here's the deal; if 9.0Dcr is close, then you are between 1/2, and 1.0 point too high on the Dcr and the same on the Scr. My calculator says to make 11.3Scr you need a total chamber volume of just 74cc. Assuming a 8.9cc gasket(.039) and no eyebrows on the pistons(you didn't mention seeing any) that means you have 65cc heads. These indicate nothing out of the ordinary yet. But 65cc X-heads are fairly heavily cut, or nailhead valves might have been installed.
So your engine is operating under a double whammy; 1) too much Scr, and 2) too much Dcr.
There is only one cure for too much Scr and that is to increase the total chamber volume. Unfortunately, to get down to 9.5 would require a huge change of 15.8cc. There is no cheap or easy way to do this. Further more we don't know what is inside the chamber without looking. There might be eyebrows, and there might be an .020 gasket, and there might be pop-up pistons in there, so we cannot formulate a plan of action at this time.
Now we could slam a cam in there about three sizes bigger, say the 292/108, in at 106, and get an ICA of 72*. This would drop the Dcr down to 8.4/170psi. While this would make a ton of power on unlimited gas, and the more sane Dcr would make a strong bottom end, this cam won't make any mpgs. It also won't put up with that TC or gears. So this is not a good solution in the long run.
Now just a reminder; this is all speculative.
If you are really running 11.3 Scr at near sealevel, you are gonna break something at WOT, soon,Especially with a small cam. It is just a matter of time. (EDIT; maybe not with your 98 equivalent gas).

There is one hope. And I would certainly try it. And that is water injection. You have an engine with a great deal of potential, as it sits. If it was mine I would give water injection a try. It is not magic, but certainly cheaper than a whole new top-end and the possibility of pistons too.Plus there is a very really possibility of a lot more power lurking in that engine, with just a cam-swap.
RSR 1000 PSI Water Injection