740 cam chain and timing

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I bought a 740 saloon with a B230E replacement engine which was destined for the scrap yard. It has a multitude of minor problems, and I've fixed a few of them, and I'm really enjoying driving the car. There is a ticking noise from the engine, and I read somewhere that sometimes this can be cured by advancing the ignition. Today I tried an experiment. On checking the distributor, I noticed that the timing mark on the distributor was below the mark on the cam cover, and I would guess it was about 2 degrees. I realigned these, and the engine sounded as rough as anything, so I moved it back and added what I would guess to be another degree. This seems to have made the car more responsive, so the first question is - have I advanced the engine by another degree? The improvement may be a bit subjective, as the Volvo feels like a McLaren after driving my 3.5 tonne LDV for a few years.

The next Q relates to the timing chain. The engine is of unknown vintage and mileage, but I believe it is older than the 1988 740. I understand that the timing chain may have stretched a bit, and at what stage should I consider replacing it? That is assuming that chains are still available. Is it an interference head, and I should play safe by replacing it?