Welcome to CHR!

The exhaust sounds like it's fairly open (Flowmaster 40 or similar with headers?) and some work has been done internally which may have included a cam with a bit longer cycle/duration. Do you know the cfm on the carb? 600-650 is fine, anything bigger will definitely consume more fuel and probably not contribute to performance. When you say you ran the numbers - are you talking the casting number of the block or the numbers stamped on the pad on the passenger side of the block?

12.5mpg overall may not be that bad - considering the weight of the vehicle and the rear-end ratio is fairly tall to get things moving. Have you done a freeway drive, say 200-300 miles at 55-70mph? My insides tell me you'll see a dramatic improvement in mpg (say 16-20mpg).

My two cents,
Glenn