318 Engine stumble

I think what your diagrams show is informative.... As background on the rotor position: At low RPM's with no mechanical advance, the rotor should be slightly CCW from directly pointing at the #1 spark tower on the cap when #1 fires.. As the ignition timing mechanically advances, the rotor position will advance CW relative to the #1 spark tower when #1 fires. The initial CCW offset at low RPM's is needed so that when the rotor moves CW with full mechanical advance, the full mech advance position is not TOO far CW to jump to the proper spark tower. This is called 'rotor phasing'; it is not just a Mopar thing.

Your left hand diagram, for the true TDC, shows the rotor to be pretty close to where it should be. So the rotor phasing looks acceptable.

Where you show the rotor halfway between #1 and #8 spark tower, for the supposed '0*' on the timing light' is a big problem. In that rotor position, the spark can jump to #1 or #8 tower when it fires for #1. If it jumps to #8 then, #8 is being fired somewhere around 90* advance.... this will happen each time the ignition fires... it can go to the right cylinder OR the next one in the firing order. No wonder you get pinging, misfires, and backfires!

The real problem IMHO: The physical point of rotation at which the ignition correctly fires at around 0* timing puts the rotor position waaay off and the spark can jump to the wrong tower and cause all sorts of havoc. This could be due to:
Using a dial-back type of timing light might be an issue, but since the engine runs like it should when your timing light show the timing to be right, then not likely. But I don't use dial-back timing lights due to their known quirks.
Hope this helps.