i'm glad somebody else in cali still drives one of these, and with it's 2bbl no less.
my '62 dart wagon has a poly318, a stromberg 2bbl, and a pushbutton 727 - all original to that car! i'm still tearing it down, but i did play with enough when i got it that i can help you a bit here, hopefully.
first off, polyhead 318's are their own world of engine. built to mimic the hemi's heavy breathing at a lower design/produstion cost, poly's are strong, reliable, and totally unappreciated. they were built with opposing valves (like all true hemi's), solid cams and adjustable rockers. remember this: solid cams are better performance items, but much less forgiving and require regular adjustment! the poly is big, with thick castings, and heavy, which is probably why no one likes 'em, but exactly why they're so reliable - they're tanks! i wouldn't trade my poly318 for a 360 of even a 383!
now, your poly is probably running poorly for multiple reasons.
how long has this car sat unused? that's always horrible for old cars.
what kind of electric ingnition did you convert to and what all did you swap?
unfortunately the holley 2bbl you have sure is crap. a stromberg will help, but they're VERY hard to find. my '62 uses a stromberg ww 3-199. your car should be able to use this carb, provided you have a hot air choke, and the kickdowns are the same (otherwise you'd have to just swap those parts too). i rebuilt mine with a kit from kragens @ $14, but it doesn't come with welsch plug or new screws. i reused & restaked my screws, but if you ever need a welsch plug for a strom ww, let me know (i may have found them by then). on the other hand, i'm sure rebuild kits are available for your holley, they're just hard to find sometimes. if you rebuild it and play with it, it may work better and save you lots of $.
your next dilema is your valvetrain. your solid cam hates your guts - it lives to make you miserable, but it makes your car happy). if your timing chain is stretched REPLACE IT! i got an edelbrock double roller for $50 @ kragens. next you need to adjust your valve lash. that means factory specs... for my '62 poly: 0.010 for intake 0.018 for exhaust with engine hot. rocker arm adjuster screw should have minimum 3 foot-pounds of tension or it needs to be replaced.
spark plugs stay the same with most electric ignitions to the best of my knowledge.
dual exhaust will only really help if you put that 4bbl on your poly. the 4bbl will allow it to breathe easier. it was a factory option, so legal even in the people's republic of california. you'll have more power, more fun, and it should run better with a decent 4bbl, but your mileage will go to the floor. also, even with a 4bbl, i'd only go with 2.25" if true dual exhaust, with a cross pipe. btw: i've been watching for a 4bbl dual plane intake for quite some time (debating that swap myself) and if it were no offence to you, i would be very interested in knowing where you know of one to be available if you don't want it.
timing...i'm still looking for a definitive resource. i have the 1962 lancer/dart/polara shop manual, but it doesn't say!!!
i'm still looking and thinking i'll buy a spec card soon. i'd try fixing other things first, then time by ear if nothing else. 10*btdc @500rpm sounds at least reasonable, just make sure engine is at operating temp and vacuum advance plugged when setting timing.
particular problems: valve lash
besides that, their so big with such thick castings that sometimes they like to get hot. to cool it better try royal purple's purple ice (noticeably lowered temp of my truck's magnum318)
hope this helps,
polyhead318