Good Morning All;

A bit of background on my 85 Ranger w/2.3L. I've had this truck for almost 2 yrs. and when I first got it, it failed the smog test. The mechanic next to the smog place removed the large hose going into the throttle body and ran water into it to knock the carbon off the pistons as he said that was the issue. Sure enough it passed and I was on my merry way.
Fast forward to this past week, and it's tag & smog time again. Had it tested and failed again.
the Nox was too high (measured 1327ppm with a max allowed of 1113ppm) Back in Sept. '10 the timing belt broke; had that repaired. At the start of this smog test, the tech. checks the timing. Low & behold it's at 0 degrees instead of 10 degrees btdc. Tech says that's an automatic fail as there's a max of 3 degrees in either direction that's acceptable. The smog tech tells me that when the timing is set correctly, the NOx will go up.
My question is this; do I have an EGR problem or should I give it the water treatment again and see what happens? Sorry for the long drawn out explanation. Just trying to get all the facts out there for an informed solution. Thanks in advance for any ideas or suggestions you can throw my way.