Effect of MisMarked Damper +5 degrees?

Make a nice mark on your cover for true TDC.

Was the 35 (39) degrees you had before where the engine gave you your best ET? If there was no sign of detonation (tops of rod bearings worn to the copper), I would put it back there as a starting point. Next test and tune day I might play with less timing, to see what happens just in the interest of science.

Ever figure out why you had so much blow-by? Rings? Blown head gaskets?