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Quick, kind of off topic question. On the 65 mustang of ours, the engine seems to be groggy. It seems to lack power, acceleration etc. It sounds good and we just gave it a tuneup: Plugs, timing, adjusted carb, but nothing seems to help. Any ideas?
Also, there seems to be some backpressure. Ill be driving and if i give it a bit too much gas, it kind of pops in the engine compartment and oil likes to come out of the breather cap on the valve covers and a little out of the dipstick tube.
There are a number of reasons for groggy performance. If your talking 65 Mustang, they came with a 289 and not the 302. The 289 is a good motor but has a shorter stroke than the 302. As far as popping? I'd check your timing, it may be either too advance or retarded. What carburator are you running? Ignition distributor and wiring come into play also. It's normal to have some blowby (oil) coming from the breather. Check to see if you have a PVC valve connected to the intake vacuum port, or see if its plugged. You can also run a different breather from the valve cover to the air cleaner, that will eliminate some of the blowby. Engines need to breath, and when they don't oil spits out somewhere? Good luck.
It sounds like the timing chain has jumped time but not enough to where it won't run anymore. The camshaft timing gear is aluminum with plastic on the teeth as it's suppose to make it quieter. The problem is with age the plastic starts to come apart and eventually leads to it jumping time, sometimes just a little and other times a lot. I've owned 21 Mustangs every year from 64-1/2 through 1971 so I've had plenty of experience with replacing timing gear sets. I had a few that had the exact same problem you describe and it was always the timing chain/gears.
flatheadjohn has a good point, however you mentioned that a 302 was put in and not the 289. The 289's and 302 did come with the plastic teeth which he described. Most engines have replaced those with metal gears. Overheating was main problem for those teeth breaking off. If you take the fuel pump off the timing housing, you should be able to see inside the timing housing to the chain or stick a screwdriver in. If the chain is really loose and sloppy, it will need to be replaced. If you have the plastic gear as flathead mentions and it appears the teeth are broken, you'll have to remove the timing housing and drop the oil pan. The fun part is digging the plastic teeth out of the pan. I had my share of those worthless timing gears. Get a double roller chain, or like I did a gear drive. You won't have to worry about that.
One more thing that I have seen and have also been guilty of is distributor placement. You can actually put the distributor in the car and time it out correctly, but if it's in the wrong position (a tooth off) it will also do what you discribe.
The Ford manuals tell you to mark the distributor before removing it, but they don't tell you during static timing how to make sure it's in the right position if you are putting the distributor in the engine for the first time - like after a rebuild.
Are your exhaust pipes big enough to handle the two extra cylinders?
I had the same problem with the oil back blow it turns out the PVC valve wasn't hooked up properly and with vacumn I think someone mentioned that earlier.