ignition timing

Ok, finally got my 86 full size balzer (350) running after pulling the engine to replace the torque converter and other leaks the motor had. The engine idles very nicely, all the fluids are topped off and i thaught I was ready to go, when I took off down the street the motor dosen't respond instantly, acts like it is lagging, not producing full horse power. At times it will back fire and acts like the tranny can't engage to the next gear untill I let off of the accelerator. i'm guessing its a timing issue. My question is what should the timing be set at and is their something else I should be looking at. I also noticed that the oil pressure gage is constantly at 60 when the motor is on or off. When i disconnect the wire to it the needle jumps past 60 to the far right instead of going all the way back to 0. Is this a indication it needs to be replaced? Thanks, Todd

I don't know about the 1986, but does it have two coolant sensors?

it just has one on the side of the block on the drivers side.

it just has one on the side of the block on the drivers side.

And there isn't one going to the computer? Ok, just checking.

Maybe the coolant sensor is defective.

Also, before swapping it out, make sure the wire is not grounding anywhere.