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You don't want to advance it too much or it'll end up firing when it is too close to TDC (...)
The problem is actually firing too long before TDC (stock cars usually run around 15* BTDC at idle.) That's what causes the excessive cylinder pressure and the problems you go on to describe.
On a side note, it's usually the rods that let go first. Kinda reminds me of a D15 rod I saw a few weeks ago, it was bent like a bananna. :eek3: