Good info of description of how it is running.
The first thing to do is to get rid of those champion spark plugs. I have never had champion spark plugs preform well in a chevy engine. Get some good A/C delco spark plugs R43TS. The reason we gap them at .035 instead of .045, is that in 1985 GM had issues with ignition coils failing. They reduced the gap to .035.
Second We need to check the operation of the decell valve. To do this, remove the hose from the air cleaner. and rev the engine up quickly and let go of the throttle. You should hear the decell valve suck air in, and the idle stay up for just a couple of seconds. This will verify it is working. If not , then replace it. It does serve a purpose , and does not effect power or performance other then coming down to an idle, and to reduce HC during decell.
Check for water in fuel. If you have water in the fuel tank, it will work its way into the carb, and cause the idle jets to get too much fuel and not enough air. Rev the engine up and put your hand over the carb opening. This will suck fuel from all ports in the carb, and pull the water through. If this helps , when the condition occurs, then pursue a fuel quality concern, ( stuff still in tank, not all will work its way through)
Look at the egr valve when this condition occurs, Is it pulling open, or sticking open??
Verify timing is at 4 deg BTDC. And make a jumper wire , and connect terminal A to C at the four wire connector at the distributor. ( GM recommended this back in he late 80"s, due the system retarding timing too much, and causing drivability concerns)
This bulletin also recommended the change from R45ts plugs to R43TS plugs.
Make sure the plug wire are routed correctly on the left side of the engine. #7 and #5 cannot be run side by side. This will cause cross fireing. Route #7 at the far back, then #3 and #1 wire, then bring #5 over the top, so it crosses over the #3 and #5 wires.
If they are all bunched together, cross firing will occur. ( engine will have an intermittent miss)
After all this, Correct plugs, wires routed correctly and boots not torn or no holes. Timing at 4 deg btdc, and four wire connector bypassed A to C. Make sure the mechanical advance weights are not stuck, the rotor should snap back when turned. If you have an adjustable timing light, make sure both the mechanical and vacuum advance are working.and vacuum hoses are connected like the diagram on the fan shroud indicate.
You can now adjust the carb.
To start, turn the idle mixture screws in till they lightly seat, and back out 2 turns( starting point). Engine should be idling around 700 rpm in park (XXXXX
With your RPM meter connected, use a propane torch( do not light, just use the gas) to en richen the fuel, till you get the highest idle and smoothest idles speed. With it running at this point turn the idle screw down to keep the idle around 700 rpm. Then remove the propane enrichment ( This is not s final idle, we just use this as a base for adjustment of mixture)
The idle will drop, or it should drop. Start turning out the idle mixture screws equally 1/4 turn at a time, until the engine is back to idling at 700 rpm. ( Note if you en richen the idle again, it should go down/ not up . This is an ideal idle mixture. then back the screws in till the idle is smooth but about 25 to 50 rpm slower. En richen the fuel again with the propane. It should go back up to 700 rpm.
This is a basic way to adjust a carb using a rpm drop method utilizing propane. as long as the mixture needles are turn the same, you should be getting around a 25 -50 rpm drop after the propane is removed. Then adjust the idle speed screw to 550-600 rpm in drive.
Some parts stores may still carry a kit for adjusting the old computer controlled carbs. In this kit is an float level gauge, that can be used to check the float level with out removing the top of the carb, and while it is running. Ideal float level is around 13/32 to 14/32 . It is a good idea just to check this if you can find the gauge to do so,. ( it is put down the slot behind the primary choke plate)
If this engine is still missing, after this. Make sure the basic compression is good. Take all the readings, and the lowest should not be lower than 70% of the highest.
Then do a running test. ( remove one plug at a time, and connect the compression tester, and start the engine. ) readings will be about 1/3 of a normal compression test.
But this will give you an idea of how well this engine is operating while running. These readings should be equal with in 10 psi. If not , you could have weak valve springs, or a worn camshaft. Then it is removing the valve covers and checking the camshaft lobes for lift, or just looking at the rockers and see if you can notice any one that is not moving as much as the others.( hint cylinder #7 and #5 , and #6 and #8 were the worst for camshaft lobes rounding)
I know this is allot of info, But if I had this in my work stall, this is the process I would follow based on the info you gave me.
Take it one step at a time, and it should lead you to your root cause of your concern.
Feel free to ask any follow up questions until you isolate the concern and are satisfied.
I am here to help you, so please just ask if you need anything clarified.