Does the computer controlled HEI control the timing? Also, I adjusted my timing the other day to where it was really retarted and it was loping so bad ***, is this really bad for the engine?

 

Yes. And, yes.

Thje ECM controls the ESC module, which will control spark advance. The ECM decides the advance based on RPM, load (MAP/TPS/RPM), the road speed (VSS), and the detonation input from the ESC.

And the engine will likely get quite hot running severely retarded timing. Since combustion is so late and usually incomplete, you are hearing the combustion being finished in the exhaust manifolds. While this may sound cool, it unfortunately also means the exhaust valves are probably running cherry-red hot and the valves/seats could be burning. You should get a really nice "lopey" sound once you burn a few exhaust valves...