do you have a large cam? Based on your vacuum I will assume so. It seems strange 2 degrees of timing would cause the engine to run on. I am not sure about the 428's but I would expect more mechanical than 24 total. It seems the distibutor should make more than 18 degrees mechanical. I may be wrong but I think there is some power to be found there. As for your vac advance you may want to find one that comes in at as close to 9" of vacuum. I would also try to limit it to around 12 degrees initially, and adjust from there. Is there any ping on light acceleration. Ping at wot indicates too much mechanical, and ping at light throttle would be too much vacuum advance. Your fluctuation is either the vac advance not haing enough vacuum to opereate or and most likely too much vac advance. I would let a few others chime in, because I can't understand the engine dieseling at such low rpm and timing? Does the engine run hot? Are you running hot plugs?