Why are my distributor cap terminals burnt?

Moisture and aluminum terminals. I know Az you live in. Wash the engine in a year? Mopar a long time ago said to put dielectic on the rotor tip, thats right folks lube te tip

You have the Malloty style and well sought after distributor. The hex screws can be loosened and then adjust the mechanical adnvance. The tabs are there for mechanical advance adjstment. Buy a set of keys. Hope it helps.
Hoppy
Oh geez, I just remembered my distributor came with a set of keys. I should use them.

We went over this a while back. Maybe it got lost in the jumble as you ended up with a mechanical issue IIRC.
I think you're right -- I had the heads rebuilt and I think I was excited to get it running again, I forgot about the advice you gave regarding timing. Sorry about that.

On the other hand 22* might have been close IF it was idling at 1200 RPM.
No sir, it was idling around 750...

Do you see that once the advance starts to move, the timing measured is no longer the initial.
Its now initial plus some advance.

The good part about the Mallory type advances is that you can pretty easily adjust them.
The uh challenge with the Mallory type advance mechanism is getting a curve that looks anything like the factory curves.

Before getting into adjusting, measure what it has now.
You have to know where it is now so you can at least guess at what changes should be made.

Get timing vs. rpm at the slowest rpm it will run, then every 200 or 250 or 500 rpm, measure timing again.
Leave the golf tee in the vac advance hose for all of this.
Only after you have the mechanical timing pretty ballpark is it ready for vacuum advance
I need to slow down and pay a little more attention to detail, and be a little more methodical. Then, maybe I won't end up missing steps or forgetting information I've been given.