On the fuel distributor problem, I forgot some important information. My mechanic suspects the fuel distributor because three of the spark plugs show those cylinders running lean. Compression is fine. He believes that these cylinders may "drop out" under load. Is this a possible condition with malfunctioning fuel distributor? Ordinarily, I would suspect a valve adjustment problem, but I believe this engine has hydraulic lifters.
As a means of peformance comparison, I have my 1986 560 SEC, same basic drive train, with no drivability problems whatsoever. At the risk of screwing them both up, I considered switching the fuel distributor from the SEC to the SL. Probably not a good idea.
1986 560SEC: 150,000 miles, runs great, but I've got to sell it (too many cars for one man)
1987 560SL: 122,000 miles, used to run poorly, now (thanks to forum), runs great!
1997 GMC Jimmy: Turned out to be a turkey.
1989 T-Bird Super Coupe: 150,000 miles, still runs great. Ford got it right.