Thanks again for all your insight, helpful info and links. I finally found someone to work on our 86 560 SL who actually knows what the hell they're doing and he's a keeper as well as reasonably priced. For anyone else in the Metro DC/Northern VA area it's Curry's Auto Service - Arlington.

The culprits ended up being the fuel pump regulator and fuel distributor...ended up costing us $3500.00 but is money well spent. Just got the car back yesterday and PROBLEM SOLVED!!! The performance is back, she runs like a dream and we can't seem to wipe the stupid grin off of our faces every time we step on the gas.