1986 Honda Civic Failed smog test - high HC

I have a 86 Honda DX Wagon 4wd with a 1.5L carburated engine. I replaced the spark plugs and air filter prior to the first test. It failed on both idle and 2500rpm tests for HCs. Max 120 and 150, my results 142 and 412. Also my idle was 1022 when it should be 750. I then replaced plug wires, cap and rotor. I also checked the timing per Haynes manual which said to plug vacuum advance line. There are three timing marks on the pully a red one in between two white. The manual says to use the red mark. Based on this my timing was off, so I reset it. I also tried turning the idle down to 750 but it ran too rough and would die coming to a stop. It sort of bounces between 750 and 900. I took it back for a retest. This time the HCs were worse, 176 and 558. They also said my timing was at 25 BTDC when it should be 15 BTDC (+/-2). It seems the plugging of the vacuum lines caused the problem with the timing

. My idle was 932. Another symptom which I believe is related in some way is, turning the headlights and/or heater on will drop the idle by 50-75 rpms. So I have a couple questions:
Which timing mark on the pully is correct?
Should I plug the two vacuum lines to the distributor when I set the timing?
How is the correct way to set the idle on the carburator?
Do I try to set the timing or the idle first? Does it matter?
How do I get the HCs to an acceptable level?
I've attached a pic of the timing marks. The red mark is under the "En" on the belt.
The second pic is the two vaccum lines to the distributor.