thanks for all the info guys,

here's an update on what ive done and whats happening.

the engine is from a 1978 camaro. i dont know the history as to whether it has been rebuilt, how many miles, stock or other wise, etc...
Firts of all, let me say that i doubled checked the distributor and sure enough it was firing well past #1 at tdc. I pulled the distributor and set it back one tooth. now the timing mark lines up good with the timing tab and balancer...that problem solved. also, the knocking has stopped...that problem solved.
BUT IT STILL OVERHEATS!!! Now, if i let it idle long enough, it will overheat to about 220-225, but only gets up to around 240-250 at highway speeds(above 50-60mph).
I tried a new temp guage...same temp readings(220-250F). I am running about a 40:60 ratio antifreeze:water now.
i replaced the timing chain/gears with a double roller. i double checked the t-stat. it's good. i checked the vacuum advance and it was toast(no suction at all) so i replaced it.

Today, i let the car idle with the front end raised about 6 inches to try and get any air out. After about 7-10 minutes, the temp was up to about 220 and the water began going way down and then coming up and spilling out of the radiator, then back down and then up again. After a few times of it doing this, i shut the engine down, and then all hell broke loose. antifreeze/water shot out over a foot high for about 3 or 4 seconds, and then settled back down...i swear i heard the thing laughing at me! Anyways, i put the cap back on and cleaned up the engine area a little bit, and a little while later i noriced that the top radiator hose was completely collapsed! The bottom hose has a spring in it, but not the top. ive never heard of anyone having to put a spring the top hose. there must be an underlying problem to it. could it be that my water pump is the wrong water pump and turning the wrong direction???

thanks,
shad