First off, you should never make changes to the timing via vacuum or mechanical if you don't have a timing light to check the spark timing. Whoever timed it before you could have the timing set where it needed to be and when you connected the vacuum advance to a manifold source now the timing is over advanced which can cause the issue your having.
When you connected the vac advance to the manifold source did the engine idle up? If not then it's likely the vac canister is ruptured internally causing a vacuum leak that is noticeable when connected to a manifold source. When it's connected to a ported source it's not so noticeable. So first things first, get a timing light, then test the vacuum advance unit, if it's ruptured get a replacement. Afterwards, you'll want to disconnect the vac advance and plug it. Set the base timing to 12 degrees before top dead center. Lock distributor. Reconnect vac advance, recheck timing, it should be 18 to 24 degrees before top dead center. My next question is you said the engine was stock besides having a holley carb on it. So I'm taking a guess the intake is stock and there's a adapter plate on it? If so that's likely causing the rest of the issue such as horrible mileage and drivability problems. If it does have a adapter plate you have two options, get a aftermarket intake such as a Edelbrock performer or the like, or get a Rochester Quadrajet to go on it which is what I would do. The Quadrajets small primaries make for excellant low end torque development, throttle response and fuel economy. Another area to why it's using alot of fuel could also be partially due to the ignition system. What shape is the ignition system in? Are you still running points or has it been converted over to HEI? If it has points I would get a points to solid state conversion kit from pertronix. Are the plug wires cheapy parts store wires? If so I would replace them with spiral core wires which last twice as long and have far lower resistance plus better sparking power than the cheap parts store solid core wires. There are other areas you can also improve to get better mileage. If you should want to know just ask.