If you have a stock 250 recently rebuilt you should be reading at least 20 on your vac gauge at idle with a steady needle. If 17 is the max you can get you either have late timing or a vac leak on your intake system. This could also cause you to have a surge as you stated. Also your timing marks could be off giving you an inaccurate reading. Set your timing by ear, advance it till you get the higest idle then back it off just till it slows (barely). Shut off and restart engine if it kicks back on the starter you are advanced to far. If it starts OK then drive it and see if you hear any spark knock/fuel ping if so you are advanced to much if not and you still have the surge and the low vac reading start checking for leaks (intake gaskets or carb base gasket or cracked intake or unpluged vac port or broken diaphram in vac advance. I have seen a bad distributor shaft bearing cause some weird things to happen it should have no side play that you can feel.
Good Luck
