Poor idle and off-idle performance after distributor swap

The problem is most apparent when climbing my steep driveway with just a tiny bit of gas, runs very rough, surges and backfires. When idling in drive holding with the brake, the idle quality deteriorates the longer I sit there in gear.
This points directly to two things;
1) your throttles are not in the right place up on the transfers slots, and
2) your float-level may be high or unstable.

That 262 XE cam is likely about [email protected], am I close. As far as cams go, this is pretty small, but the right idea for an 8/1 nominal Scr 360. I should make gobs and gobs of low-rpm torque.

From your description above;
1) your mixture screws are out too far ..... because
2) your transfer fuel is insufficient ...... because
3) your throttle is too far closed, because .....
4) your timing is too advanced..

So;
You need to set the Transfer-slot exposure, underneath the throttle plate to a tiny bit taller than wide, make it just perceptible. You do this with carb removed, the choke and fast-idle disengaged, the throttle closed, and use the curb-idle screw. Make sure the secondaries are closed up tight but not sticking. Ok flip her right side up, and set the mixture-screws to 2.25 turns out. or about in the center of their working range. From this point on DO NOT ADJUST THE CURB IDLE SCREW.

Ok, flip the top off and lower the wet fuel level back to stock or up to 1/16 inch lower. Be careful not to bend the metering rods on reassembly; I highly recommend to remove them, first.
Alrightee re-install it, pour some gas into the bowls thru the vent , splash a lil down the primaries, tug some timing into her, give her some throttle opening, and fire it up. Let her run on the fast idle until she warms up, then kick her down NOW, pay attention. You will now adjust the idle speed with timing. Just push the Vcan towards the firewall untill the engine wants to stall, then advance it a bit.
Next; make sure your PCV is hooked up to the correct port, and discharging into the primaries just below the throttles.
If you have a power brake booster, PINCH the line off.
Also pinch off or defeat the Vacuum advance. And make sure all other entry points into the intake are capped, including all that may be on the carb.
Next; prove the intake is NOT sucking air anywhere except thru the primaries and the PCV. This includes sucking from the CC. To check this, you put a vacuum/fuel-pressure gauge on the dipstick tube, flip the PCV out of the VC, and plug all other entry points into the engine. Then watch the gauge. At idle speed it should make PRESSURE. Do not let the pressure exceed 3 or so psi, because 4 can blow out your rear camplug, in the bellhouse. I wouldn't be your friend then now would I,lol.
Next; having proved the engine is tight. Set your idle speed, using timing , to 600/650 in gear. Forget about what the timing light says, just do it.
Next; Hook up the Vcan to the SPARKPORT. Rev the engine up to about 1800 to 2000 rpm and put it on a fast-idle step. Exact rpm not important;
Next; screw the mixture screws in/out, equally, to get the highest rpm. then add 1/4 turn out. Finally kick the fast-idle off. Reset the Idle rpm... USING TIMING, as may be required.
Next; if the engine is not ticking over nicely; Take a shop rag and stuff it into the secondary side to see how bad it is leaking. If the rpm changes more than 50 rpm, something is wrong, the blades are not closing all the way. Fix it. After that is done. and you think the engine idle is still too ruff for a 218* cam,lol; Then, take that shoprag and begin to cover the primaries this time. If the rpm goes up, then the engine is idling lean. If the rpm goes down, then she is idling fat.. So the first thing to figure out is where are the mixture screws set to. While counting the turns, close each one, one atta time. Write the turns down. Average them out and put them back . They should have been at around 2.5 turns out, +/- .25 turn. If they are that is perfect.

Now, here comes a lesson.
Your low-speed circuit consists of four parts; the wet fuel level, the transfer slots, the idle trimmers (mixture screws), and the various holes and air bleeds. It is your job to mix these in any proportion to satisfy the three basic conditions that they control, namely; the A/F ratio up to about 2400 rpm no-load, and the idle quality, and throttle tip-in.
We did the first one, ballpark. Next we did the idle ballpark.
Now lets do the tip-in before we move on.
Next; let the idle stabilize for a couple of seconds, then slowly tip the throttle in. You are looking for a sag, a hesitation, or a bog. If you don't have one then I guessed pretty close on the T-slot exposure. When the engine idles, the transfers are spewing fuel together with the mixture screws. A low fuel-level makes the spewing harder, a high fuel level makes it easier. That portion of the Transfer slot above the throttles is bypassing air around the throttles and slamming the fuel being discharged. If your transfer slot is too small, the thing tends to dry up, and the more you have to open the mixture screws to get the fuel. After the slots dry up, there is nothing there to sustain the tip-in, and it takes a few milliseconds to start it up again. In the meantime, the mixture screws were already at their limit, so you get a serious hesitation; sound familiar?
On the otherhand, if you are up too far on the transfers, she will idle rich, and you will shut off the mixture screws. It idles fine like that cuz it has the right amount of combined fuel coming from the two sources. But as soon as you tip in the throttles, she goes lean, and you get a sag in power.
End of lesson
Next, we need to get that tip-in fixed so try it, a few times, always waiting about 10 seconds in between for the idle mixture to stabilize. From the results, determine if you think it is rich or lean. Consult the result from the idle mixture test above, in blue-type

If you need more fuel, and the idle fuel also needs to go up, then if the mixture screws are already at 2.5 or more turns, then;
add 1 turn of the CURB-IDLE screw. If the idle-speed changes, reset it with timing!. Then recheck the tip-in. Continue in this way, counting the changes in the curb idle screw. Because, when you figure out that you might be going the wrong way, you need a reference point to get back to.
What I usually do is after the T-slot exposure was set, I back out the screw until the throttles close and the curb idle screw comes off the adjuster, counting the turns as I go; then write it down. So now, if I get lost, I can get back to the starting point.
Ok, so when you get done all this, you will be targeting a few things;
1) lean-best AFR at 1800rpm plus 1/4 turn @ ~2.5 turns out
2) a nice smooth idle with the mixture screws @ ~2.5 turns out
3) no tip-in hesitation
4) a smooth light-throttle take-off
5) a low enough idle speed in N/P so as not to have it bang going into gear.
6) A high enough idle to still have oil-pressure
7) IDK i'll think of something
10) who cares what the idle-timing is!

Your engine doesn't care about timing until you hit the stall speed and again at about 3400 rpm at full power. Notice that this is the first mention I have made to timing. Do not get excited about idle-timing! it means nothing, let it be what the engine asks for.

Next; you determine what your engine wants for PowerTiming, usually 34* at 3400 is plenty of baseline for a Low-Compression SBM.
Next; you determine your stall, and stall-timing, Which should be as much as possible but not so much as to get into detonation.
Next; you recurve your D to hit those two points, but the advance sghould not start until 200 to 400 after idlespeed, so that you have a stable platform to idle around on. If your advance starts too early and too high, the engine gets to be hard to control at low throttle openings.
Ok now your timing has been worked out for exactly TWO conditions namely. WOT and idle. Under all other conditions, your timing will be dead-wrong.
Next; is your cruise timing. You cannot play with this until your power timing has been fixed. So the first thing you need to determine is what speed you are gonna cruise at. Say you have 3.23s and 65=2700 This is too easy; just rev it to 2700 and put it up on the fast idle cam near that. Then just advance the timing , and keep on advancing it, until the rpm peaks. if this is not 2700, then readjust the speed to 2700 and change the timing again to reach the highest rpm near to 2700. Read the balancer. Obviously you will need a timing tape or a dial-back timing lite. Write it down. return the engine to idle. Put the timing back to where you started from. Now disconnect the Vcan, and rev it up to 2700 again and read the timing again. Write it down, Return the engine to idle and hook the Vcan back up.
Next; subtract the lil number from the big number, and that is ABOUT what your Vcan is gonna have to bring in for best fuel economy. Suppose at 2700 you had 2O* in the D and 7 idle for 27 total. And suppose the engine wanted 48* then 48 less 27= 21 in the Vcan. Well yur in trouble I have never seen a Vcan of that size. But write the number down anyway!.
Next; you will want to optimize your cruise timing at other speed points that you spend a lot of time at. Say for example at 35 mph or 55 mph. So you figure out your rpm at those points and in the gear you will be driving them at, just as before. Then you just rev it up to those rpms, and pull in the timing just as before. Then rev it up without the Vcan as before and again do the math and figure out what timing is missing. You will get some pretty big numbers. You will have to limit the Vcan to the smallest amount. So if that is say 16*, then you need a Vcan to pull in 16*, but if you find the smallest is 21*, BINGO, all you gotta do is modify your current can, by grinding off the stops (Chrysler can), until you get the magic number, BadaBOOM! OK NOW, your engine has half a chance at fuel economy, AND your PT performance will pick-up dramatically.
But you have one more parameter to solidify; If at any time or rpm,you get detonation at PT, you need to eliminate that. On a Mopar can you can stick a tiny allen wrench into the hose-nipple and turn the screw that you find in there. CCW will delay and slow the onset of advancement. You'll still get it all, you'll just have to wait for it.
next; after this is all done; you get to start over, cuz once the timing closes in on perfect, you can lean out the carb some.

Now; occasionally a cam will want more air at idle than what the PCV is able to give. The engine will tell you this by emitting exhaust that burns your eyes. IDK what that is, but when it happens, it sucks. I think your 262 should not do this, But if it does we can talk about that later.

Ok I'm gonna edit some to make it easier to read, but this should cover it
and all-done.
I realize this doesn't address your intermittent flying spark, so back to your main thread.