Gary,
The referenced specs show that for the 65-67 18V HC, dist. #41288 -- 18-22 @ 2200 rpm plus 10 initial which gives 28-32 as you said. Down a few lines for the 18V HC dist. #41234 -- 26-30 @ 4500 rpm plus 10 initial which gives 36-40. I don't think that you would have any trouble by going up to 38 max at 4000 rpm, depending upon fuel octane, & amount of carbon in the combustion chambers.
Since the actual distributors advance can vary greatly with manufacturing tolerances, age, & condition, the factory is going to set a limit that is safe for all engines regardless of fuel octane, engine condition, distributor tolerances, driving habits, & possible carbon build up in the chambers. In my opinion, max advance is not really critical until the compression ratio starts to exceed 10 to 1. It will have to be your judgement call.
D