HBG,
What you need to find is a greybeard that can tune a real motor.
Three two's should run fine on your 350 with straight or progressive linkage. If it has a stock cam (which I suspect) that would explain why it runs so well with end carbs. blocked off. Vacuum leaks and the way the pvc and breather are installed is something that should be checked. I have used a vacuum gauge to tune for years and it is how you adjust a carb. and I use it to set timing (although a race motor is another story). Some folks will probably not agee with this method but there's more than one to skin a cat.
I adjust carb. for higest vacuum reading (adjusting mixture and idle speed) and adjust dist. untill I get the highest reading. I usually have to back off timing a hair if I have trouble starting, but that is usually not a prob.
So much for my rambling. I hope you figure it out soon.
Keep on Truckin' (Roadsterin' )
Jim
P.S. 12 MPG sounds awfull low, 18-20 seems more in line with your combo.