Great - if the problem is fixed, you're golden. Caps are cheap. Note if its just the number 1 cylinder, pull and check the plug gap also.
For a '76 motor with dizzy number 41646 your timing should be 2d AfterTDC with the vacuum connected. Sorry, I assumed you had a '77 engine. As you point out, 76's had a vacuum retard, not advance.
There has been lots of discussion about timing values in another Spitfire thread in this forum. I have a '78 Spit with a '76 engine also. At 11" Hg the vacuum retard unit is supposed to provide 12 degrees (crankshaft) ignition retard. These units have quite a bit different centrifugal advance profile than the '77s.
The official manuals say to strobe-set the timing with the retard attached, and to set it to 2d ATDC. As a check then, once you have set your timing, if you pull the vacuum line off the dizzy (and plug it) you should see your timing go to about 10d BTDC on the strobe light.
As noted in the other posts, every engine will run slightly differently. In addition, the vacuum retard and/or the mechanical advance are not deadly accurate (particularly after 30 years of use). The general consensus is to start with the official spec setting (2d ATDC) and then to vary it a bit depending on your own engine characteristics. My suggestion is to vary about 2 degrees from spec up or down until you are satisfied with overall driveability and performance.
Having said that, first go through the necessary checks to make sure your centrifugal advance is working reasonably well, and also that your vacuum retard unit is working properly too.