bouncing timing mark

I'd guess that with that lumpy cam, it's bouncing around the sloppiness in the timing chain, dist. gear/cam gear etc. Is there any way to get the idle down lower and smoother?

Yeah, change to a mild cam or install EFI...LOL

As was pointed out...the timing chain and gears can cause this. Install a 5.2/5.9 Magnum timing chain tensioner P5007709 (available at the dealer, production part) and, if it is the problem, it will smooth right out. It replaces your cam plate on the front of the block. I started using these on all small block mopar engines...it is an improvement.

The internals of the distributor, the oil pump/intermediate shaft and gear, and the bushing in the block can all cause this problem. The bushing is pressed into the block from the top and, if it has never been replaced and you've got a bunch of miles, it's probably worn out of spec.

Another culprit is the design of the distributor drive itself. By design it allows some play in the timing because of the oil pump, the valve springs and the general slop between all of the parts.
Dan Dvorak came up with a timing stabilzer that mounts on the distributor.
His website explains it pretty clearly.
http://www.dvorakmachine.com/timing_stab.shtml