The 650 AVS isn't too small for your engine. You could use an Autolite 2bbl and you'd still be fine. Of course, an 850 of any manufacturer could also be just fine. It would go without saying that the 2bbl would be limiting in a performance application, but it would work just fine for tooling around town. The properly tuned 850 would also be fine for tooling around town and be great when you pour the coals to the engine even with that very mild 262 cam.
Your current carburetor may be flawed or you may have other tuning issues. Perhaps you should look into all of the possibilities before throwing money at the problem, no?
What's a "run of the mill 4160"? You might not be aware that the 4160 is just a model type, not a specific carburetor. In that regard, it could be anywhere from 390 to 750 cfm. A 4160 Holley just means it uses a metering plate on the secondary, rather than a metering block. Doesn't mean double pumper, dual cathedral float bowls or anything else. Just metering plate on the secondary.
You also might not be aware that out of the box carburetors are great for nothing in particular. They work fine in most situations, but are not optimal by any standard you'd care to use. The difference between what some might consider too large CFM capacity working and not working is tailoring the boosters to the engine.
There is another similar thread running on this site that makes this thread look suspiciously provocative.
