Wrong distributor for 69 318?

As far as the new distributor goes...
Assuming the condensor and points are OK (and that's a big assumption) the thing to determine is the mechanical and vacuum advance.
Mechanical advance is probably where the issue began (again assuming the condensor is OK).
You can get away with a super quick mechanical advance when not using any vacuum advance. This is how the DC/MP race distributors were set up - and there is a slight advantage when the engine is relatively cold, such as when drag racing.

Mechanical advance on a real '69 distributor is going to be very fast and go quite a few degrees until around 1600 rpm when it will slow down.
Advances were set up like that so the initial timing could be set retarded toreduce certain emissions at idle.
IF that's the type of advance curve in the WAI distributor you got, then setting the initial at 13* instead of 0* at 700 rpm results in way too much timing between 1000 and 2800 rpm to work properly with vac advance.

I recall you had some threads about setting this engine up more as a hot rod. So with that in mind, 10 or 12* at 700 rpm might be close to what it wants. That you can test by observing rpm drop when placing it into gear, or how much throttle you need to add if its a manual shift. In both cases less indicates more power.

To solve this, measure the timing at 800, 1000, 1200, and every 200 or 250 rpm. Then you'll know what has to be done next.
If it advances alot in the first few hundred rpm, then a limiter plate will not solve the problem.
=> The easier may be to set the timing at 0 or 5* at 650 or 700 rpm. Then use manifold vacuum for the vacuum advance. With a strong idle vacuum like your engine seems to have, this will increase the advance at idle. If its relatively stable and consistant then this is a crutch that you can probably live with.
=> The more technically correct approach is to weld up the inside of the governer slots. If the idle is unstable (often happens with engines that idle rough) then this will be the best solution.