How much power loss are we talking about? 1%? 5%? 10%? Rough estimate say I'm making 60 hp.

Retarding the timing a couple of degrees will loose at least 2 to 3 HP on most of these engines.  Retarding the ignition timing also raises the exhaust temperature.  Raising the exhaust temperature increases the possibility of burning the piston on the exhaust port side of the piston as well as hurting torque and shifting the whole power curve higher up in the RPM scale.