[cleandan]

mannyjoe, the A/F numbers should tell you a bunch. It appears that at WOT (wide open throttle) you are a bit lean. This will hurt max power, cause excess heat, and not allow for full timing. If the lean condition is any worse you get spark knock (detonation) that is not always heard and this is a major cause of many engine failures.
What did the dyno operator say/suggest? (if not much find a different dyno)
The 342 should be able to handle more carb so you may want to ditch the LIST 1850 (I,m assuming here) Holley 600 CFM vac secondary carb. and get something more high performance friendly. I would start by running the carb a little richer. If you have O2 bungs tune with a wide band sensor. Go for idle in the 13-14.2 A/F area, cruise/light acceleration in the 13.8-15.8 A/F area, and WOT in the 12.0-12.8 area. After you get the A/F right you can then add more timing if needed. A total, all in, around 36-38 should be real happy. Adding timing can make the A/F a little more lean so double check this after all the changes. Make certain you have enough fuel volume to keep the carb full at WOT otherwise you will be chasing your tail for tuning. Good luck.