Initial startup cooling system troubles

Thanks everyone. So far I have not connected the vacuum advance. The 28 degrees was a starting setting for mechanical advance at 2500 rpm. I'm sure it goes into the mid-30s with a few more revs. Once I can trust the engine to run long enough without overheating I'll set the total advance.

The issue with your timing being not as far advanced as it should be points to your overheating problems. Not enough advance in this no-load condition initiates combustion too late to where there's still-burning hot mixture hanging around in the cylinder during the exhaust stroke and going out the exhaust valves and heating up the heads and headers/manifolds.

It's almost impossible to have too much timing with no load at break-in RPMs, at least enough to cause problems. The engine would probably start surging and running odd before anything bad happened. Don't be scared to crank that thing up to 40* for break-in, and/or hook up the vacuum advance during break-in; this is precisely the running conditions that vacuum advance is intended for anyway.