[142 Guy]

Blocking off the line from the oil filler cap to the manifold would result in you losing the 'positive' air flow for the crankcase ventilation system. This will result in the faster accumulation of moisture in the oil with potential sludge build up. However, most cars up to the early '60s used this non positive ventilation so it will work.

Since the crankcase ventilation hose seems to affect your problem, make sure that you have the hose connected to the correct nipple on the intake manifold. The correct nipple will have a restricting orifice in it (I think its about 1/8") which limits 'false air' flow into the intake manifold. If you use an unrestricted nipple you will have too much air flow and won't be able to properly set up idle.

You said you set the timing at 10 deg. According to the 1971 Volvo service manual the B20A ignition is set to 21-23 deg BTDC with the engine running at 1500 RPM and the vacuum line to the servo on the distributor clamped off. I don't know what the values are for a non North American 1972 B20A so perhaps confirm the correct values for your 1972 B20A. As described by others, make sure all the base tune settings are correct before trying to diagnose further.

On an off chance, since you have a 123 distributor, make sure that the advance settings are correct for a B20A . In North America the up to 1971 B20A engines used vacuum advance as opposed to retard. I don't know whether the 1972 versions continued to use vacuum advance so make sure you haven't mixed that up if you have a 123 that is programable.