OK, so I've checked my cone and it is virtually flush when cold, so I guess it's sticking more than out of adjustment. Is relatively simple to strip, clean and reassemble this unit? The BMW manual says not to try.
@c.d.iesel - lol, I haven't been ignoring your advice. The motor is newly built, rebored with NEW 89.5mm pistons and rings, so I'm pretty sure the compression is good and equal (raised to 10.0:1 from the std Euro 9.5:1). The car is newly restored, so all the fuel lines, filter etc are new and the gas tank was cleaned and new fuel added to a dry tank. I haven't checked the fuel presssure, but I checked the return flow to the gastank, and 1L of gas is pumped back in 30sec which falls into the 0.8-1L that I have read in the manual.
The timing was set statically - the points just about to open with piston #1 at TDC on the firing stroke. I don't have an adjustable timing light, so any advice on how to set the timing at 2,500rpm will be appreciated.