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Have you checked the governor and throttle plate to see if they are opening? Have tried starting fluid?
Backfiring is a timing issue. Does this unit have the ECS system (no throttle cable- drive by wire)?
If you say the valve timing is spot on & the ignition timing is spot on- then I would suspect that the electronics are failing. I have found that when Toyota electronics begin to fail, they need a HUGE adjustment of the distributor (usually advanced) to get them to start, then backing off of the ignition timing to keep them running.
Seems to me that if the compression is good on all cylinders, and it's backfiring through the intake, something has to be wrong with when it is sparking.
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