Hi, BrianPetersen. Below, comments on your remarks.
"Backfiring through the intake or out the exhaust isn't a compression-ratio-related issue."
Me > Sure, CR has nothing to do with those blows. CR was mentioned because it is potentially an issue to cause knocking. Since present malfunctioning is preventing engine of raise RPM, even with no load, an eventual knocking has not been perceived and/or has not occurred yet.
Those (apparent) backfires may be due an insufficient ignition timing as you have already commented. It is going to be checked.
"It's an ignition-timing-related issue ... or a someone-mixed-up-the-plug-wires issue, or perhaps an air-fuel-ratio way out of whack issue."
Me > Yes, improper plug wires connections could cause all that mess, but it was already verified.
Erroneous A/F ratio is one of the possible reasons for engine malfunctioning, but if it´s really happening, it seems to be a secondary factor.
"Even with wasted-spark, under normal operation, the extra spark happens near the end of the exhaust stroke, and there shouldn't be enough air and fuel mixture in the cylinder to ignite at that time ... unless the intended ignition a revolution before was a misfire because of the air-fuel ratio or the ignition timing being very far from where they should be."
Me > Yes, wasted-spark is not a intrinsic problem, but can be an issue when a very little ignition advance and/or higher valves overlap. I think that´s not the case, but the huge CR may obligate to employ a (very) little ignition advance, becoming a problem. Let´s wait for results.
"Were any changes made to the engine at all? Spark plugs were installed where the original injectors or glow plugs were installed? If that's the case, it will have maintained the diesel engine's flat cylinder head and bowl-in-piston high-turbulence combustion chamber."
Me > The only changes we have been told refer to replacing diesel injector with spark plugs. Stock pistons, crankshaft, camshaft, valves, CR ans so on were maintained.
My company is basically a ignition system maker, not a consulting provider, so we don´t interfere on costumer´s project, although, depending on situation, we discretely suggest and/or recommend reconsideration on some project specification.