when you say its not advancing or retarding properly, do you mean not at all? or going the wrong way when you give it gas or something?
check your coil/ignitor and also the distributor. is the loom all standard/uncut? do you know for sure that all the important parts on the engine are working OK or are they second hand parts which have been sitting in someones shed for awhile?
does it backfire at all? if yes, is it out of the exhaust or the inlet manifold?
I'm pretty sure ive finally fixed my 4age bluetop (put into a ke35) tonight after having the same problem as you (among about 20,000 others). been working on it for the last year and ive replaced nearly everything on it.
basically it wouldn't start consistently, sometimes it wasn't even driveable or it wouldn't idle, other times it would run perfect. before that it kept running really rich. then just recently i noticed the timing was all over the place, and it would go the wrong way when I put the throttle down (advance instead of retard, or vice versa I always get confused with the two!)
