I agree. The possible damage from detonation is something you don't want, even if the extra timing helps the pop. That's a LOT of compression pressure. I would be looking for a known GOOD compression gauge, JUST to back up those findings. Once verified, I don't think you're going to need the extra timing due to low cylinder pressure. But it is well worth double checking with another gauge to verify.
Have you put a timing light on the balancer to actually watch when (and if) the mechanical advance is coming in? I'm wondering now if something there isn't amiss. I would try to verify everything with one system (timing) first and move on from there.
An AFR setup would really help you here so that you could actually SEE if it's lean. Have you read the plugs?
