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Well, damned if I know what to tell you. Do you think the carb is too lean?
I don't think the coil will cause spark knock. You have problems somewhere else for sure. There is no way you should have spark knock with this much vacuum advance locked out. Did you test drive it with the vacuum advance hose removed and plugged? Have you checked to see how much total advance you are getting, not counting vacuum? How much vacuum advance do you have now?
Something is wrong for sure. Only other thing I know to tell you is check the carb to make sure it's not running lean. Make sure you don't have any vacuum leaks, which of course will cause it to run lean.
If all else fails, and you can't get it to quit spark knocking, and everything is the way it's supposed to be setup, it may be time to try another distributor. Something just isn't right here. There is just no way this thing should be doing this. Only other thing I could think of for a remote chance is carbon buildup on the piston tops. You could try some top engine cleaner, or some tranny fluid poured real slow in the carb. It will smoke like a freight train, but if anything is in there it will clean it out. I've done it before and it does work to clean out the combustion chambers.
Mike
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