This is no plug for the Club's archives, but if you buy the older newsletters from an earlier incarnation of a Bellanca Club, there is a test performed by one of the -2 guys. He got his to 19K, and checked performance at that altitude and below. Yes he had oxygen fed through a mask. Yes, it was legal back then to fly above 18k without ATC guidance.
Power does make a difference. Although the sweet spot mentioned is accurate, performance higher than that is simply a reduction of the percentage of rated horsepower. A light 'Master with 230hp still makes slightly over 170hp at 8000 feet, running 50 degrees rich of peak. A mid-time O435 is lucky to make 170hp at sea level. As we all know from our basic flight training, climb is a product of thrust exceeding the power needed to maintain level flight.
Much depends on the wing, of course. I recall a narrative written by Luscombe's Chief Engineer of a night flight to Newark in the late '40s. He found the glass layer at 15k, relaxed (you could not lean back with those bench seats), turned in a radio station on his ADF, and lit up a cigarette as he enjoyed the ride. The only other traffic as he approached Newark was a single Convair. The engine on the airplane was a C90, but every ten square feet of wing was charged with hoisting one pound to aloft.
Many factors influence service ceiling. How high I fly depends on winds aloft. I carry oxygen. Higher often means stronger winds. If I can catch a 30kt tailwind at 12.5, I'll go a lot faster than if I have no tailwind at 8,5.
Then again, the only time I actually had to use my oxygen tank was when I was flying from Seattle to Austin, and there were fires around LA - they seem to be a feature of the area nowadays. The oxygen allowed me to ignore the choking smoke.
In short there are no hard rules here. If you're wallowing at 12.5, though, that's an inefficient way to fly. Robbie Back did not baby that engine. When I flew with him, for example, around Blakesburg, he'd use to prop control as an air brake to slip into formation with buddies. He said the engine was tired anyway and he planned to rebuild it that winter. He thought harder about it later, realized he only needed two seats at that time in his life, and sold the Bellanca.
I hate to say it, Jerry, but I'd run a compression check on your bird.
Jonathan