I had a similar problem with both my Kent and Pinto Motors for my MKII Escort, they had a lot of head work includeing wild cams, there are two things you will need to do...
The most important thing to do is ditch the points. For $300AU you can go to Auto barn and buy a Crane universal Optical Electronic Ignition conversion, and get the matching coil too ($60). The reason your engine is fluttering is due to point bounce at 5000rpm.
Once this is rectified you may run into a second problem of valve bounce (around 6500 rpm), to fix this see your cam grinder and get springs to match your specific cam, don't just buy any springs as too light will not improve anything and too heavy will wear your cam out too quickly.
My escort is a 2.1L EFI with 60 thou 10.5:1 lightened and balanced with 20thou oversized valves and head porting with a custom cam. I run 15.6 naturally aspirated :)
If you have any more questions about either the Kent 1600 or Pinto 2000, e-mail me on firstname.lastname@example.org