Hesitation problem solved!
 

My 87 coupe was hesitating and bucking at anything above 4000 rpms so I took it to a mechanic. At first they found that the distributor was on backwards and not straight and it had caused some arching and had actually burned some of the wires.

But that wasn't causing the hesitation because after replacing the distributor cap, rotor and ignition wires, it was still hesitating.

After some investigation, it turns out the connection wires in the rear had come loose and when the engine moved under full throttle, the movement of the engine caused them to come loose thus the hesitation and bucking. The mechanic said when people drop the engine, they sometimes forget to disconnect those rear wires. When the engine gets dropped, those wires get stretched and their connection is sometimes loosened. The mechanic speculated that this is what caused the wire problem.

Driving home, it felt good to pull the engine waaay past 4000 rpms!

Glad to see your back on the road Clay. Hope it wasn't too expensive.

Now just keep it between the white lines!

Clay, which connection wires are you referring to?

Randy,
They are the wires coming off the harness at the rear of the engine.

There is only one multipin connector that comes off of the harness which is the 6 pin connector that controls the injectors. It is easily overlooked when dropping an engine, but impossible to miss upon install as the engine will not start without it connected. Was yours not plugged in all the way??

The balance of the wires that come off of the harness are connectors for the sensors, air flow meter, idle switch, and WOT switch.

Marc,
The mechanic noticed that when the car hesitated, it was losing all power and not to just one cylinder. After looking around, he saw some loose wires in the back. He then cranked the car then pinched the wires and this caused the car to totally shut down.
The wires were plugged in all the way. I think they were just in bad shape from possibly being stretched when the engine was last dropped.