its on the exhaust side of the block threaded in infront of the oil filter. is it not revving past 4k exactly or does it change. That could be a few things. Check to make sure your secondary injector clip is in good condition. Check your intank filter screen (there is an access panel under the false floor in the hatch area on drivers side(disconect power first!!!) and the inline cone screen before the pump. alot of times these small screens will be come clogged and not able to provide fuel at higher rpms. If you just swapped the head maybe your timing is a tooth off. the knock sensor on later years wont restrict all that much. On 88-89 assuming you have a two port waste gate(really 3 ports) it will restrict your boost to 7.5psi and i believe will restrict your preprogramed advance but your mechanical advance and vacuum is not affected(im not sure if your vac advance runs through one of those solenoid valves or not). I got rid of all that mess.

hope this helps

matt