Meanwhile I'll keep tossing out ideas:
Not sure if that one has the knock sensor as I was unable to locate a manual that goes back further than OG303046. Have you guys disabled knock detection as a test to see if that effects the low speed idle mixture? It's possible there could be false knock detection causing a rich offset and possibly retarded ignition as well. Note: If the knock circuit was not disabled when setting up ignition advance (I haven't checked the procedure) a malfunctioning knock circuit would change the initial ignition timing and if the circuit is malfunctioning then that would need to be rechecked.
Under normal conditions when knock is not occurring, the knock sensor circuit advances ignition by 6*..... If knock is detected it retards 8*, thus if disconnected there is no 6* advance from initial mechanical advance. So if you disconnect while running you should notice a 6* later ignition timing. Also, fuel mixture is increased when knock circuit detects knocking.
So start with the sensor itself, is it properly fastened to the block and/or was it damaged (possibly by over torquing at some point)? Then move on to eliminate the knock sense circuit as a potential issue (by disconnecting the wire as described).
"DETONATION CONTROL SYSTEM FUNCTION
1. Combustion noise (or vibration) excites the
piezoelectric circuit located inside the detonation
sensor, which transmits a voltage to the control
module.
2. When cylinder number two ignition primary fires,
it signals the controller to look at a one
millisecond window of sensor output, which it
retains as a reference level of combustion
“background noise.”
3. When “background noise” reaches a measurable
value, usually between 2500 and 3500 RPM (it is
dependent on load), the ignition timing is
advanced 6 degrees beyond what the
mechanical timing is set at. Timing advance is
accomplished by lowering the bias voltage.
4. The controller continues to monitor sensor output.
If the output exceeds a pre-determined
threshold level over the “background noise”
(which is indicative knock is occurring) ignition
timing is retarded by up to 8 degrees and fuel flow
is enriched by up to 15% until the sensor output
is reduced below the threshold level.
The detonation control system actually acts as an
ignition advance module, when knock occurs it takes
away the advance. Ignition timing will not advance if:
a. Knock sensor fails.
b. BLUE/WHITE wire becomes disconnected.
c. BLACK wire has poor ground connection.
d. PURPLE power wire becomes disconnected.
NOTE: Disconnected GRAY/WHITE wire will not
affect ignition timing and will not allow fuel
enrichment.