I'm thinking that the friend's statement was on 2 topics because I can't see how the timing would cause an oil leak at the head.
However, that aside it certainly does sound like your timing is somewhat retarded. When the spring post lines up with the timing mark that's about 15° ATDC, that's according to cam chain adjustment procedure anyway.
If the dowel for the advance mechanism is installed correctly, I'd have to suggest replacing the points & then see if the correct ign timing can be achieved by normal adjustment.
It musn't have been running real well with the timing that late surely?