7mgte stumble HELP

[ccguy]

no difference with premium fuel, valve timing is spot on with cams and crank
if i hook up a timing light (without the jumper in for setting base to 10deg) and slowly rev up the motor i can watch the crank mark move up to around ~35-40 (guesstimate) deg advance when i rev up the motor slowly.
at the beginning of the hesitation the ign advance will retard to around ~25deg or so.
no difference in the timing advance with a knock sensor unplugged.

i understand that the wideband O2 will read lean even if the injectors are spraying the correct fuel at the correct time, but if the ignition is not there and the combustion does not turn the O2 into CO2 then the wideband will read the amount of O2 in there and not read the unburnt fuel. i have a feeling that this is what is happening when the hesitation is going on. i just need to figure out why the ecu is retarding the timing???