The plugs aren't the problem, carburation is where you need to look. late timing will affect performance, but the black sooty plugs are a sign of loading up. Idleing around will load it up, but a good hard run should clean it out, and the transom coloring may be a result of the idleing. What carb is on it, and when was the last time it was gone thru?...As far as gap, .035 with that ignition, and a max (ballpark) advance of 28-32 degrees @ 3000. That's MAX, initial should come out about 10-12, depending on the amount of advance in the dist. This can be tough to set without a "dial back" timing light........MP