Hello emilios!
a10gf and muskrat are absolutely right. If the lever is pulled back toward the rider, the ignition is retarded with your magneto. Take off the primary chaincase cover, mark one tooth of the crankshaft sprocket and make a matching mark for TDC on the inner chaincase, slowly turn the engine in its working direction and look at the magneto breaker contact. When you move the advance/retard lever, you will notice the difference in ignition timing.
When setting the timing put the lever to fully advanced position. I would recommend 33-34deg BTDC with the iron head A10.
about your M20: driving with retarded ignition does not necessarily badly damage the engine. Usually the worst thing that can happen is a burnt exhaust valve due to the higher temperature of the exhaust gas (and exhaust pipes turning blue rather badly). So if it is running fine and the power output is ok when timing is set correctly, I don't see the necessity of taking it apart, unless you just enjoy doing so
Check over how the advance/retard mechanism works, check and set timing and you are fine.
imho the best way to set ignition timing properly is using a timing disc and cheking with a timing light, which both are available for small money nowadays.
Cheers, Markus
