1. One hour into a outing, wot was perfect, but the problem started at about the two hour mark. It had been perfect before this outing.
A bad ignition coil may act up when it warms up. Perhaps replace the coil.
2. Plugs, points, wires, are new, but I only timed it at idle (850 rpm). I'm not sure how to do the 4,500 timing,
You will increase RPM as you continue to strobe the timing marks.
Write down the advance numbers at varying RPM info in graph form.
(see my example below)
or the dwell.
A dwell meter is required for this.
3. I was told, by the Volvo Penta dealer, that a bad tachometer could cause the problem. That is why I disconnected it. It had been acting a little irregular prior to this matter.
Good call!
4. Could a distributor advance mechanism go bad so quickly?
Unless one of the flyweights or flyweight return springs was rusty and finally failed, it generally takes years or rust/corrosion for one to go bad.
Might it just be sticking, and need lubrication?
Yes, that is a posibility.
If a flyweight was sticking and was not returning to the BASE advance position, the progressive and TA will be incorrect.
IOW, while you were adjusting for BASE advance, the system may not have fully returned, therefor the advance from what you only THOUGHT was BASE, will be wrong.
5. Could a bad coil, or condenser cause the problem?
see #1.
6. Which of the aftermarket electronic ignition systems are good.
If you're talking about a retro fit kit....... none of them are.
The Hot Spark, Pertronix, and the likes are all Hall Effect.
Keep in mind that the kits do ZERO to correct any shaft wobble or wear to the advancing system within the existing distributor.
However, this is your only option unless you are willing to spend around $650- $700 or so.
I'd suggest staying with the contact point system and keep up on the maintenance.