I'm waiting for my baby to get back from the engine builder and mfg. as I was having the same basic problems you are, the backfiring through the exhaust. Never noticed any excessive heat though and everything on the header/sidepipe side ran perfect with no bubbles. The reason it's at the builder is the engine locked up spinning every single bearing in it.. all the rods and mains, ruining the crank and all 8 rods. In my case and I'm not sure it's yours but it's something to watch out for. I have a roush built 351W, the cam it has is, while not the most radical, still fairly tall. .544 lift and .296 dur. this caused the vaccuum to litterally drop to near zero from the first second the throttle was pushed. While in itself this is great (for a racing engine) it is not great for a stock demon carb with a power valve in it set to open at 6.5". What was happening was the second I pushed the throttle the power valve came open and stayed there about 99 percent of the time the engine was running. Of course you can imaging how much fuel was being dumped into the engine.. not only did it cause the plugs to turn sooty black, foul, but it also turned the
oil into water, washing all the bearings and cylinder walls as well. Right from day one I kept saying there was a problem with the way the engine was running cause it was backfiring through the exhaust every time I stepped on the gas. timing was good. everything else checked was good but they kept putting off changing the carb as I requested. Well a simple 20 dollar fix is not costing them several thousand dollars to fix. Anyway what this boils down to is you said that it's a bit rich and for breakin I suppose that's ok but be aware that too much fuel can lead to really nasty results.. Mine had about 2000 miles on it. and yes I just picked up the car in April.. I LOVE!!!! driving that car, LOL...and the looks and comments I get around town are worth every mile I put on it.. besides I didn't buy it to just have it sit in a garage and look at it.. I bought it to ENJOY it. and I intend to.. ooops sorry I got off on a tangent.. anyway. In my humble experience with exhaust "backfiring" I would have to say that the most likely cause is the rich condition on the fuel side.l Just keep an eye on things and have fun.