John,
Your 1.7 liter Autorotor is about perfectly sized for a 3.2 liter motor. Putting too large a supercharger on an engine yields poor volumetric efficiency. The wisdom shared by your dealer is actually based in fact. I've seen intake manifold boost levels drop as I changed to better heads and exhaust plumbing. I've also seen boost levels go UP when I added an intercooler that didn't flow as well as a previous one. I was using Eaton blowers so your Autorotor should put out a little more volume at lower temperatures (a good thing). My experiences were based on 1.8 liter engines and 1 liter superchargers).
HOWEVER, you should probably be seeing a little better than 10 psi over 6000 engine rpm and keeping blower RPM at 13,000 or slightly less (unless you're into some really efficient intercooling, valves and exhaust parts). I'd guess more like 12-15 psi.
Goran has shared some of the info I used to build my most recent spark advance table. Here's what I'm currently using:
