Idle surge

My 340 has a surge at idle when it's hot. It will idle at 650 then jump about 100-150 rpm every 3-4 secs then fall back. Last night I noticed that when deccelerating and popping it into neutral the idle would drop to 1000-1100 and stay there for 20 secs or so. At that point it would idle down and carry on as usual with the surge. The engine is relatively new (600) miles. 10.7:1, eddy heads, MP performance electronic replacement dist.,msd blaster coil,Crower stage 3 hydraulic cam, rpm air gap (no end gaskets just silicone),brand new holley 750 vac, 727 w/2500 TCS convertor. Fuel pressure starts high when cold about 12 psi, but drops to about the 5-7 psi range when hot. The fuel pump is a mechanical unit. The other strange thing is that when the car gets to temp, it almost idles smooth?? This is a .500 plus lift hydraulic with 227-237 at .050.