1986 C20 350/400 wont go past 2500 RPM in Drive

[demian5]

Help - My son has a bone stock 1986 C20. It free revs fine, starts fine idles fine.

When driving, it craps out at about 2500 RPM in 2nd and 3rd gear, like fuel starvation or plug wire miss.
Manual in first gear it will pull till you shift it, no lack of power or miss.
Free rev it will rev great, secondaries open and everything. Runs strong.
Choke pull off is working. No vacuum leaks.
Stock Q jet that we have gone through way before this started happening.
HEI with new cap and rotor after this started happening.
Weights in distributor free.
It does diesel after being warm when shutting off.
Did the spray bottle of water on the plug wires at night, nothing arching (plugs and wires new in the last year R44TS).
Timing at 6BTDC (however when warm, and vaccum line still connected, still 6BTDC).

Any insight? Should there be vacuum on the dist when warm at idle?