Great news on the lack of vacuum leaks!
Definitely look/listen for exhaust leak. Do it with the engine stone cold (metal contracts when cold, so crack, or gap will be larger). In Tony's picture, see how the crack is white-ish. You'll see that but it may be much thinner line or spot. If you didn't remove the exhaust valve, look closely with an incandescent flash light and mirror all around it.
The "hose trick" for listening works awesome just make sure to wear gloves. The colder the engine is, the easier it will be to find a leak.
Next use a vacuum gauge to check mechanical condition. Plenty of YouTube videos on this. here is one example
https://www.youtube.com/watch?v=SdlNwm8OHco
If the vacuum gauge test shows issues, don't stress. We can tune around a lot of this, for now, just by cheating the system.
We just need to know what those issues are, so we know how to "cheat".
If there are no exhaust leaks, and the vacuum is smooth and of reasonable pressure, I think the hunting issue can be limited with tweaking the tune.
We may also want to play with engine displacement, if the tweaking getting exaggerated. But let's cross that bridge down the road.
Once the hunting is mostly resolved, the HEI can be installed. Timing control function of the MSD will be of help with any minor hunting issues left unresolved.
Something to consider on timing. Harmonic balancers slip. So just because your light shows the marks aligned at 13*BTDC, doesn't mean that is really where it's at. Also, "book" timing is just a guide line. Not a hard rule. Elevation, fuel, engine condition, EGR function, all affect timing.