Where you set your ignition timing has nothing to do with run-on, because ignition timing shuts off when ignition is shut off. Or at least it should...
When the engine is dieseling, is your "gen" light on? If yes, you often need to do "the diode trick" to prevent the problem...
This is not just an MSD problem...I linked it because they explain the fix better than anyone else with a nice diagram. But just like after MSD conversions, this problem is also common after HEI conversions...particularly if you have an external voltage regulator...which I assume you still do.
