Causes of detonation?

I run the same cam in my 318 with 302 heads but have a bit more compression and headers. mine likes about 34* total and I run 89 octane. I would say for your setup I would pull the timing back a couple of degrees (all in by about 3k) and run a mid grade gas. I would say the lack of power is the restricted exhaust but nothing to do with the pinging. its simple enough to find your problem by just pulling a couple degrees out and put some good gas in. cheaper than shelling money for the exhaust and you could be causing damage to the motor driving it around like that. remember on a scale of 1-10 audible ping is about a 7 so.... try simple and free first.