You say "Checking the light indicates that the points are opening 3 and one half revolutions of the dial too early." I interpret that as the reading on a dial indicator which has been inserted into the spark plug hole.
It looks like you may have misread your dial indicator gage. You say the timing was 350 mm BTDC, but the Bultaco engine has a 60 mm stroke! Any chance you were using an English units dial indicator gage where one revolution corresponds to 0.100"? That would make your reading 0.350", which corresponds to a believable 8.9 mm BTDC.
Larry - Pasadena