Large RPM and Vacuum drop when shifting from park to gear

So, it turns out my car had wayyyy to much initial timing.

I checked it with the timing light and had 35 degrees of initial timing with the manifold vacuum disconnected!!! So I retarded the timing until around 15 degrees of initial. My car idles at around 1100, and putting it in gear drops it to about 900. I didn't go any lower than this, because I noticed my voltage drops too much if it idles lower (sub 12 volts).

I noticed that at these idle numbers, my timing is not constant. The mark moves between 15 and 20 degrees. My idle is lopey and rpms oscilate +/- 50 rpm. Could this lopey idle be the cause of my "unstable" idle timing? Or could my timing light be defective?