Is this the new 340 or the 273 with solid lifters?This is a hydraulic lifter engine - stock 318 ?
I ask for two reasons.
Initial timing needs will be a bit different. On the 273 go with the stock specs, probly around 10-12* at 550 or 600 rpm. 340 will need more depending on cam & compression.
Other reason is solid lifters out of adjustment and the starting compression will be low. Not saying this is the problem, but my had this on his Saab (and other cars) due to some valve recession or similar wear. If it doesn't seal fully it doesn't run well. I also had that on my jeep when the valve springs failed - but there's no adjustment for that! Lots o fun (thats what happens when rusty pitted springs are cleaned and reused)