Mercury 2.5l retarded timing cause engine damage?

[Rider_560]

I just rebuilt my 1995 Mercury 2.5l carbureted powerhead. It's on the back of a 26ft deck boat. I took it for the first test run this past weekend. Probably totaled 2-3 hours runtime. For break in I never kept a constant RPM for an extended period of time. Im pre-mixing my oil, ran it 20:1. I set timing on the water to 21* btdc. I manually pushed the advance arm against the WOT timing stop. I felt the boat was down on power, only reaching 27-28 mph. Occasionally I got the boat up to 5100 rpm but felt I was trimmed up to far to do so (new to boating). Anyway, come to find out the advance arm was missing a washer behind it causing it to hit a the side of the cylinder before it ever hit the stop when using only the throttle lever by the steering wheel. Result was my timing was only adavancing probably half way. I was curious if the timing being to far retarded from spec for that long could damage my rebuilt powerhead. Boat never overheated, plugs look good and compression is just over 120 psi on cylinder #2 and 125-130 psi on the others. Thoughts?

[XstreamVking]

All I would do is correct the problem and set it to specs and run it. I doubt it hurt anything.....

[LakeFever]

Check compression, if its good, reset ign and your good to go

[Rider_560]

Took the boat out over the weekend, not much better. I reinstalled the idle stablizer boxand it ran much better, set timing back to 19*. The boat is still only going 31-32mph max. At this speed I'm only getting about 4800rpm. I can trim up significantly and get it up to 5200-5300 rpm but no gain in speed (trimming up too much?). When I rebuilt the motor, I put two new switch boxes on. Advertised on eBay as CDI, but actually are off brand JAE. Could this be it? I have 125-130 psi on all cylinders. Dropping a cylinder at high rpm? Seem to run great now, just not getting full rpm. Everything else is stock.