So, a little reading has refreshed my brain juices. It's all in there, just hard to access sometimes.
A quick reread of the OP first post also kicked off my thought process as well.
NOx (oxides of nitrogen) is formed above 2500f. By retarding the timing, you are reducing peak combustion temperatures. This is also what EGR does: reduce combustion temperatures. Reducing the combustion temps allows two things to happen - reduced NOx and the stave off knock. In this case, the benefits of reducing NOx are obvious. What is not so obvious is the knock issue. By reducing knock, the ECM/PCM can dial in more advance. This increases fuel mileage and performance but more importantly: it makes for a more complete burn in the cylinder. This reduces PM (particulate matter) and reduces the HC (hydrocarbon) load the convertor has to deal with.
Considering the OP's EGR trouble code, I would look there first. Either the valve functioning or perhaps the head passages. The over triple the NOx limit while reasonably close on HC seems to bear this out also.
The HC are a different story. With no other fault codes, I would suspect converter efficiency (ie: old) or just not enough heat in the converter when the test was run. Retarding timing gets the convertor to "light off" sooner due to higher EGTs and further reading reveals this has a larger effect on reducing HC than the late burn does in increasing HC.
I would suggest the OP run the truck down the highway for 15-20 mins before going in for the test to get it all up to temp and perhaps into the temp range sooner during the Emissions testing rather than too much fiddling with the timing. It will also help to get the O2 sensor into the closed loop range sooner when testing (O2 senor starts working at 600F) as the manifolds and exhaust will be warmer form the get go.
The down side of retarding timing is the reduced in cylinder combustion temperatures leads to higher PM. If this is not sampled in the test, its not that big of an issue. The same thing happens when running water injection on a diesel. It reduces peak combustion temps which reduces NOx. But it also increases PM which can make them fail the "snap test".
I'm thinking his issues primarily lie in that EGR code.
If the OP wants to retard timing, I would suggest only taking out about 2-4 degrees from stock base timing. This is close enough to stock that if they check (some states do apparently) it should pass and still offer some reduction in the problem emissions.
I would sort out that EGR code/issue before doing anything else though. That, and get it good and hot (ie: good long highway run so it stays in lean burn mode) before you take it in.
Think about pulling a touch of timing and maybe dumping in a bit of "snake oil" (anecdotal evidence seem to indicate 10% ethanol does just as good) if it gives you peace of mind.
Then let them stick that sniffer up 'er pipe and let 'er eat!
. If that isn't an option than crc makes something called garunteed to pass, if you use it and fail, you get your money back
