I'm definitely grounding the correct terminal- the large tan single wire plug on the passenger side firewall. It works correctly (it retards the timing about 10* when grounded). The 10-15* I'm getting is with the plug grounded- so it is at about 20-25 when ungrounded, obviously a problem.
There is no way (physically) to move the distributor to 5*.

As far as I know, there is no knock sensor on this engine. I certainly never came across one in the rebuild process, unless it is a variety that I am unfamiliar with.

Frank- when you say the distributor module, do you mean the power module thing that is mounted next to the coil?

Thanks