Effect of MisMarked Damper +5 degrees?

With the combo you had I dopnt think 5° did much of anything. The static compression was a little low for the cam so it would be sluggish there. And the convertor is high for a mild geared 4" arm engine adding to the soft lowend. The blow by is more the result of poor bore finish and ring seal. Just for fun... Did the machinist (or yourself if you assembled it) measure the side clearance on the rings? Too much side clearance (not end gap, but the clearance between the ring and the ring land) will also let a ring flutter and lose it's sealing.