What kind of plugs are you using when you spray? ...NOS 125... you run a dry kit? As for timing... are you looking at the display screen before you cross the quarter mile and seeing 41*? Reason I ask is when my car is at idle the timing bounces around from 34-45* I don't see where 41* is bad considering you run alum. heads (I too run ported RPM heads) and aren't experiencing any knocks or pings. I'd drop it down to 38 and see how the motor likes it there next time you make a pass at the track to compare MPH and ET between the two settings... somewhere to start. That should give you an idea on whether or not you even need to run that much timing...
What is your compression ratio btw? I don't recall reading what it is, other than you saying that its low... (edit) I found it! 10.1 isn't really that low, it's not really that high either
Also, what do your plugs look like after you make a pass on nitrous... should be choclate brown to a light ash gray