Perry,
it looks like the blue bushing is the standard one that comes with that distributor and is supposed to be good for 21 degrees mechanical advance. They make a black colored bushing (the largest one they list in the instructions) which is good for 18 degrees advance. Theoretically you should have 16 degrees initial and 34 total. 18-20 degrees initial timing would be better, but you can see what happens with 16 degrees. You may still end up having to make a bushing, or welding up the slot where the bushing rides.
It also sounds like someone installed the two lightest (silver) advance springs since the advance starts below 1000 rpm. You need to slow down the start of the advance curve-something like 1200 rpm. I would install the largest (black) advance bushing, replace one of the light silver springs with one blue one and see how that works. This should be the kit you need:
MSD Ignition 8464 - MSD Advance Kits - Overview - SummitRacing.com
Dana
This scenerio is one reason why I like the Mallory Max Fire distributor: plug in the laptop (or remove the distributor cap), set the rev limiter, chose one of the factory preset curves, or design your own mechanical and vacuum advance curves, and you're done. Best of all: no MSD box to leave you stranded....knock on wood.