did you reset the timing after adding the new Ignitor II module? Does that module require a specified air gap for the pick up and if so did you set it and verify the setting?
I think your coil failure is just one of those things that happens over time and you didn't cause it, though leaving the key on (engine not running) will burn one out over time but it won't crack it.
Check that your distributor hasn't turned. What you are describing almost sounds like the engine timing is retarded and when the mechanical advance kicks in you get enough timing to smooth things out. On fast idle you had just enough advance to run okay when it slowed down and the weights in the advance allowed timing to return to base your engine timing was too far off to maintain a decent idle.
or you have a massive vacuum leak