Skip White Distributor install by a dummy, with ?'s

I don't know 1986 engine wiring. Was that the "lean burn" system?

1. A tach should come off coil-. Coil+ is supply (after ballast), so your extra wire is probably supplying something else (emissions device) or to a capacitor (noise suppression for radio). Check a wiring diagram. On coil- side, remove the existing wire (should go to your factory ignition module).

2. You might need new plug wires with HEI. If so, Magnum engine ones are labelled for cylinder, which is nice. They probably also fit the cap on your HEI distributor. Don't you have a crank mark for TDC? If so, remove #1 plug and feel for the compression stroke with your finger. You will have to initially set the distributor by eye. It sparks when the "pickup fingers" align, but won't actually spark unless turning fairly fast. The Crane XR700 pickup I use in several cars is "DC accurate", so you just turn the distributor until the LED light first comes on to indicate "spark" position. Set it at TDC initially or maybe 10 deg BTDC if you feel lucky.

3. Yes, bypass the ballast with a jumper wire or spade-spade terminal between the connectors. Then remove the ballast since it will have no wires on it. If you simply disconnect the wires, you will have no supply to coil+.

4. I bought Skip White's e-core coil for $20. I also paid $45 for his distributor, which was the price I recently saw on ebay. A coil from a Magnum engine is an e-core and doesn't use a ballast. Just snip off the connector to wire it, but check a diagram for correct polarity of the 2 wires. It will spark either way, but one polarity will burn up the spark plug ground electrodes. The coil sits at the front of Magnum engines, which makes me think that is needed to keep it cool. The GM "external coil" (85-95 V-8 ) and Ford TFI coil are similar choices, but perhaps harder to wire. The GM coil has an integral tach output which might be useful to some. See megasquirt site for more info.