318 rpm drops to 400 in gear WHY???

Though the converter/cam combo is not optimal... I will +1 for carb/vaccum checks and explain more what happened on my 318 setup with a 484 purple shaft/X Heads, 340 converter (in 1985 :-?)...

Car ran and idle'd fine at 900-1000 with carter AVS, but had similar vaccum to yours at around 10-11" at 1000rpm. Switched to a Holley 750 vaccum secondary and engine lugged and struggled to hold an idle in gear. Tried a friends Holley off his running 340 (stock cam) and same issue. Found that the carb had a #65 powervalve in it stock which was designed to open below 12" of vaccum (power valve delivers extra fuel flow when throttle is cracked/vaccum drops before plenum vaccum allows gas through carb venturi). At 10" of vaccum the valve was fluttering and loading up the car so it struggled at idle and when the car was in gear the 200rpm drop also dropped vaccum more which dumped more fuel hurting the idle speed and vaccum even more. The car would run but lugged and even shuttered sometimes. Switching to a #35 power valve (opens at <7" of vaccum)cleaned up the fuel issue and allowed for reasonable idle of around 1000rpm in gear. Since you had worse results with another Holley I feel like your problem is carb (+timing) related.

Mine took a while to diagnose since it was only when the converter drag took the vaccum below 10" that the car really suffered. Any Holley-type carb will have to be tuned to work with a lower than normal vaccum signal.