Engine Car Wont Rev Past 4/4.5k

I decided to take a test light hooked up to ground and see if I could fine spark arcing out anywhere. This is what I found. Could this be the cause of my problem? This set of wires is a week old. I cant hear or see it without putting something against the wire but as you can see from the pic its def arching off. Its so small I almost feel like thats not the cause.
dizzy arc.jpg
 
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I returned the msd cap and rotor and ordered a set of 8mm spiro-pro taylor wires with a matching cap and rotor. Im also considering retuning the screaming demon coil and ordering an oem motorcraft coil. Im still convinced the problem is ignition related but if non of that works im giving up and sending to a shop for a diag at probably $100 an hour.
 
I was thinking the same thing^^^^ also i would use autolite or motorcraft wires they will last a lot longer plus they have a better warranty. I have learned my lesson about performance ignition parts..they don't last long.
 
ok guys i think i have finally fixed my problem. My Taylor wires, cap and rotor finally came in today. After the install the car runs like a raped ape all the way to redline with no problem. Im going to guess the main part of my problem was the wires. the wires i got with the car looked like they had been to hell and back, i swaped those with some ford racing wires and got no change, i then found out that the ford racing wires where arching out so i returned those and got the Taylor cap, rotor, and spiro pro wires. All seems well for now and im super excited to finally have the car running like it should. thank you all for your help and advice i have learned so much about the fox platform while trying to diagnose this problem and have come to love it even more.
 
Well I guess I spoke to soon. I had the car out today and it drove mint for about 20-25mins and then started doing the same exact thing. Im almost sure the problem is heat related considering it drove fine yesterday after the new cap rotor and wires and it drove fine today until it got hot. I limped it back home and immediately swapped the dizzy and set timing to see if I got any change and I did not. Everything in the ignition system is either new or confirmed ok/made no change. It literally does nothing when you go wot. Doesn't skip anymore doesn't act like a 2 step it just dies off and holds a steady 2500-3000 rpm and has no power. I know you guys have already said the tps has nothing to do with my problem but if it loses output signal when hot and at half or wot couldnt that in theory cause a similar symptom? Bad maf throwing things off? After driving this car when it acted ok I want it fixed more than ever but im completely out of ideas.
 
I checked all the grounds and made sure everything was good. Codes are
85
85
12 idle speed control
93 tps sensor or circuit
39 auto overdrive circuit
62 trans circuit fault
The car is a 5spd so I dont know why im getting the tranny codes. No smog or egr hooked up. Iac seems to work fine so idk why that code is there. Tps itself has a portion od wire showing but volts looked ok.
 
Okay that code 93 tps low voltage ..would also cause the car to loose power just as the code 23 would. Check for broken wires at the tps sensor harness or bad/broken wires on the tps sensor.
 
I checked all the grounds and made sure everything was good. Codes are
85
85
12 idle speed control
93 tps sensor or circuit
39 auto overdrive circuit
62 trans circuit fault
The car is a 5spd so I dont know why im getting the tranny codes. No smog or egr hooked up. Iac seems to work fine so idk why that code is there. Tps itself has a portion od wire showing but volts looked ok.

Do you have an A9L or A9P EEC? That TPS looks more like someone messed with it than melting. Slap a new one one, do a base idle reset and as long as the TPS voltage is between .50 and 1.1 with the throttle closed your good. On afermarket TPS, you may need to open up the screw holes so you can wiggle the TPS to get it within that range. Do not worry about getting the magical .999 setting. It doesn't matter.
 
Its an a9l. It looks like the previous owner sanded/ground down the tps in an attempt to get a little more adjustment out of it. In the process they went to far and pulled one of the wires out kinda far.