Off idle hesitation - solved

You should be able to see the timing mark advance with rpm.
With a dialback light or timing tape you can measure timing beyond the marks on the engine.

7* at 750 rpm falls within spec for the original distributor if its initial was set at 5*, 550 rpm.
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(All I did to create this graph was to mark 5* at 550 rpm. Then take the distributor degrees advance from the book, double them and add them to the 5* initial.)

I don't think this is timing related based on what you've described so far. Having driven it wih vac advance plugged and still having it happen, and its just in the off idle range, it just doesn't seem like it would be the cause.