Yup, I agree with them.
Too much initial timing + Ignition curve = too much timing in higher RPMS
Remember, as your RPMS go up, your plugs are firing "earlier" (more advance)
Seeing as how you're mechanic claims your making 85 more HP with just a .020 over bore and maybe a cam, I would wager your compression ratio is higher as well.
Just out of curiosity, what are you running for fuel? (87 or 94 octane)
Higher compression ratio = higher chance of detonation = higher octane needs
Do as everybody else suggested, retard your timing by 8 degrees or so, and take it for another rip. You will loose a little bit of bottom end, but I would wager your top end would come back, because you will no longer be detonating at higher RPMS.
Sounds to me like you need either less timing, or more octane. Another quick and easy way to find out, go to a roofing supply store and buy some Toluene and add it to your tank. Do some research first, but it's a surefire way to get rid of detonation. I used to run this stuff in my turbocharged drag cars. Don't go to concentrated, or you risk damaging your pump, lines, or seals. 20% or so is okay, and would give you a significant octane boost.
Here's a little bit of info from wikipedia
http://en.wikipedia.org/wiki/Toluene
Toluene can be used as an octane booster in gasoline fuels used in internal combustion engines. Toluene at 86% by volume fueled all the turbo Formula 1 teams in the 1980s, first pioneered by the Honda team. The remaining 14% was a "filler" of n-heptane, to reduce the octane to meet Formula 1 fuel restrictions. Toluene at 100% can be used as a fuel for both two-stroke and four-stroke engines; however, due to the density of the fuel and other factors, the fuel does not vaporize easily unless preheated to 70 degrees celsius (Honda accomplished this in their Formula 1 cars by routing the fuel lines through the muffler system to heat the fuel). Toluene also poses similar problems as alcohol fuels, as it eats through standard rubber fuel lines and has no lubricating properties as standard gasoline does, which can break down fuel pumps and cause upper cylinder bore wear.