I'd agree with a number of these suggestions, but not all of them.

IMO, to get the most efficiency out of the engine you need to maximize the use of each power cycle. So make sure the charge is as lean as practical, ensure it is squeezed as tightly as octane permits, then burn it as completly as possible.

So, based on what I've read so far, I think the best bang for the buck will be a small duration cam. Getting the the cylinder pressure up to more completly burn the charge can be accomplished by altering the cam timing events.

Tuning the carb with a O2 sensor will give you a good picture on where in the range of use your mixture can be dialed back some.

Others have already brought up the distributor and ignition issues. Find The Dr's Guide to Improving Your Ignition for more info on how to step these system up.