Disappointing dyno results

I cannot see it making more power on a smaller carburetor. Those original AVS carburetors were "around" only 500 CFM. They didn't flow a lot. If it's running rich, it either has a carburetor problem, or doesn't have enough timing. Just one peon's opinion.
Actually I believe I read somewhere 554 cfm. On a stock dual plane manifold, 4 cylinders would get 277 cfm. Definitely could take a bigger carb, but the path I would take is tune that carb and verify the timing is right and that includes making sure the distributor has the right advance curve in it.

Other than that I, I believe compression is suspect.