Troubles with car

You are absolutely in the right place; welcome!

'Doggy out of the hole' indicates 1 of 2 things:
1. Too much cam for what is already a low compression engine; I actually WOULD expect a drop in performance with the 340 cam at low RPM's; your 318 is low compression and a bigger cam will automatically drop what is called dynamic compression ratio, which is going to directly lower you low RPM torque. This is what AJ explained in hard numbers in his 2 paragraphs comparing the stock to 340 cam.
Making up for this with ignition advance may help to some degree as suggested in post #4 and you can go much more than 10 degrees. But you need to then limit total by working inside the distributor. All that is very doable.

2. Cam installed wrong, with the crank and cam sprockets not lined up right. Hard for us to say what was done here. Did you find the true TDC of cylinder 1 and check the crank damper mark and line up the sprockets with the engine set that way? If, not then it is time to first find true TDC and check your damper's timing mark.

With the mildly larger cam, you can fix some of this by re-installing the cam advanced, regardless of what else you do. I would not hesitate to advance it 6 degrees or even 8 degrees with that engine. (ICL around 104) That will raise your DCR and give you back some ow end torque.

Then, if budget limited, shave the heads .050" (about 8 cc less chamber volume) and use .028" head gaskets.

With the 2 above changes, and starting with AJ's DCR number of 6.43 with your stock engine and the 340 cam, I come up with an increase of DCR to 7.4, a jump of one whole point in DCR. That is pretty good for the money. You may have to shim up the rocker shafts by about .020" to make up for the milling, and should definitely mill the intake to match with that much head shaving.

The above is not the way to do a real performance 318 IMHO, but sometimes budgets are what they are, and you need to try to do what you can for what you have.