92 mustang lx 5.0 tach surges to 3500 but engine idle

Looking for suggestions! The tachometer on my 92 mustang LX 5.0 raises to 3500rpm when engine starts however, the engine is idle. When the engine is revved past 3500rpm the tach appears to work appropriatelyy and when the engine is shut off the tachometer falls to zero, turn the key on and the tach appears to jump to 250rpm, start the car (http://www.automotiveforums.com/vbulletin/#) and it is at 3500 again. I just purchased the car a month ago from the guy I sold it to 11 years ago, pretty neat story. The car has been maintained stock except for; cold ram induction, pulleys, 160 degree thermostat, aftermarket rims(have original and will put back on immediately), aftermarket stereo, and catalytic converters cut off (straight pipes) to the mufflers, sounds great but not street legal in any state. Also, When accelerating through 1-2-3 the check engine light comes on when car is at 3500rpm and above however goes off when rpm's fall. Thinking this is an emission thing since cats are cut off, what do you think? Also, I am looking to put cats back on but would like to go aftermarket to reduce it down to 2 converters instead of the 4 that came stock. Again, any input appreciated.

Magnaflow makes good 3-way high-flow catalytic converters, so you'd only need a single cat on each side.

Also, you may have to remove the 160 degree thermostat for emissions purposes. The engine computer expects temperatures of atleast 170 degrees and anything less may keep the engine running rich, killing whatever cats you do install. Perhaps this is why the previous owner removed the cats in the first place? I run a 180 t-stat in my 4.6L with a tune to turn the low speed fan on at 184. Not sure if you can tune it as easily on an OBD-I equipped vehicle.

Get your codes read or save yourself some time and go buy one of those diagnostic jumpers you need for OBD-I vehicles and look it up. It may be a simple emissions code due to the cats, or it may be running lean above 3500 because of a weak fuel pump. We can guess all day or you check it.