R Pope is right.

I'd like to add that since the engine is lightly loaded at the 2600 rpm level, vacuum levels at that rpm - regardless of how big the cam is - in a well sealed engine (meaning rings and valves) is probably at 18"-19".

Apparently your vacuum advance is connected to manifold vacuum (IE: tapped below the throttle blades) and you're getting full vacuum advance.
Add that to the all-in or nearly all-in mechanical advance and your result is the 55 degrees BTDC you obtained.

Doesn't hurt anything and in fact is the way to do it.

Mechanical advance is rpm related.
Vacuum advance advance is load related.
Once you roll the throttle on, the mechanical advance will advance the timing - if you're below the all-in timing rpm level - and the vacuum advance will retard the timing.

Look at vacuum advance as a vacuum retard device and it may be easier to understand.

Looking from here it looks like everything is working as it should and like R Pope says, disconnect the vacuum line when setting timing. (Plug the engine end with a golf tee or the like.)

After you've set the mechanical timing, connect the vacuum advance and see if it works like it should.
IE: advance under light throttle settings and retards when the throttle is depressed.

Be careful and stay out of the plane of the fan when doing these tests.