OK - if you have an M distributor, the "timing going away" could indeed be the problem. Here's what I'm thinking:
The stock SMD distributor has an 7 deg advance. The stock M distributor has 40 deg advance. However since the M distributor is being spun "backward" on an SMD, the 40 deg advance actually becomes 40 deg RETARD.
Consequently if the distributor is timed at correctly at TDC with the engine stopped, when the RPMs come up the timing will be 40 deg AFTER TDC, not the 7 deg BEFORE TDC the engine requires. Ie. the timing will be retarded 47 deg from ideal at speed.
Ideally installing the correct distributor for the SMD is the fix. However you can probably get it to run using the M distributor if you disable the centrifugal advance mechanism so the spark occurs at TDC regardless of RPM.
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