Slant Six Won't Rev over 3500 RPM

Yes, Charlie should know..... I'd still check it by looking at the #1 and #6 valves with the timing mark at 0. One of those 2 cylinders should have the 2 valve open almost equally, with the exhaust closing and the intake opening. And make sure to recheck the mark on the pulley being at 0 with #1 truly at TDC. This is such definite problem that nothing should be neglected.

Is this one of the Bassani mufflers that take a fiberglass packing? If so, I wonder if this is exceeding the flow limit or the glass has come loose. Beyond the exhaust, is the bowl vent open? What is the setup for the fuel lines and tank? Fuel pressure sure would be a good thing to monitor.