Revision in the intake manifold is causing the mist to come out of the carb. Revision is caused by the cam timing being off, or the firing order being wrong. I would first check the firing order, if it's okay I'd be looking at pulling the timing cover, and rechecking your timing marks.
The bouncing vacuum gauge could be caused by incorrect firing order, it's the easiest thing to check, verify it's correct first.
From the description I would say the cam is retarded, causing the intake valve to still be open as the piston is on it's upstroke. Doing a cam change in chassis, it is fairly easy to think you have the marks aligned, and they are off. To add to this you have 3 adjustments to choose from with the timing gears.
Reread the directions on your variable keyway timing set, and double check your work.
I've been called many times over the last 50 years to fix situations such as this, and usually it's something overlooked when reassembling the engine. If it ran fine before the work was done, it a distict possibility it's in the reassembly process.
There is a slight possibility of defective machining, or parts, but 99 times out of 100 it's an oversight, it happens to everyone at one time, or another. All the guesses that the valve adjustment was causing the problem were incorrect. From my own real life experience, I'm telling you the obvious order of troubleshooting your symptoms.
