Usually the vacuum line should be disconnected from the distributor and plugged while checking the timing. Your vacuum advance is working, that's why the engine smooths out whent you back off on the throttle, as this increases vacuum and advances the timing. The timing being right on the timing mark may not mean a great deal if the harmonic balancer rim has rotated. Try advancing the timing a little at a time and accelerating up a hill in high gear. If it pings, back off the timing a couple of degrees. Also, you have advanced it too far if the engine kicks back when you try to start it.
The vacuum advance advances the timing during part throttle operation and does not advance at full throttle operation when under load, thus preventing pinging.
