That cam is not big enough overlap wise to need to run OL. I have had sucess tuning a 232/240 on a 108 LSA in closed loop. What I would look at is the transition from idle to main spark advance. Big changes in timing between the two can cause the surge you are seeing. If you are rolling along at Zero throttle somewhere between 2 and 10 mph almost every GM tune I have looked at goes from close throttle spark to the main spark table.