Anyone tried only 8 plugs on a high compression race application?

You have a Waste Spark ignition on that gen III.

Both plugs are not firing at the same time in each cylinder. They are firing the one under the coil pack on compression, the other plug that is firing on the exhaust stroke on the opposite paired cylinder. Hence the name "Waste Spark Ignition".

Leaving all 16 plugs in, but eliminate the lead to the 2nd non-coiled plug.

This only applies to the '03-05 5.7 G3. The ones that had a snake nest of ignition wires running over the intake manifold.

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All others use the ignition coil you pictured that fire both plugs at the same time.

As far as I can remember, the '03-05 5.7 can run the later valve covers and coils without causing PCM codes or anything. I don't know if there was a performance advantage, but I know it cleaned up the motor significantly so many do it for that reason alone.

But, your post does point out that at the inception of the G3, the factory was running the motor on a single plug. So it might work.

My gut says a single plug will be worse than the dual plug, but it's just a guess.