Questions About Engine Swap

chapters707

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Jul 13, 2014
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Hi my motor unfortunately has met its end and is going to need to be replaced. I drive a 96 mustang GT and am looking for a new motor to swap in. I would like to just get the same one that's already in there but with fewer miles on it. I believe I have the 4.6l SOHC is this correct? My car is a manual but can I get a motor from an automatic and still bolt it right up? Also does anybody know of a reputable place to find used or rebuilt motors? I am skeptical of some salvage yards I've researched because they have horrible reviews. Any help appreciated thanks.
 
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Will you be doing the work yourself?

To answer some of your questions. Yes it's VERY easy to convert a motor from automatic to manual or the other way around. It just takes the correct pilot bearing and the correct flywheel.

Honestly much of the success or failure of a motor swap will depend upon the installer more than the suppler of the donor motor. After all, the motor will be on an engine stand where it's easily accessible and repairable. Bottom line. No one should buy a whole salvage yard motor and blindly install it into your car.

When going the salvage yard route here's my recommendation. The laws require that the donor car's VIN has to be retained. Ask for the donor's car's VIN and run a CarFax report against it. Compare the mileage as reported by CarFax and the mileage as reported by the salvage yard. Avoid any salvage yard that way under states the motor's mileage.

Note, if willing to install a PI 4.6 it's possible to get donor motors from up to a 2011 model year Crown Vic.
 
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Wow I think that is what happened to me, referring to the salvage motor. I have a 2003 Mach1 (4.6 DOHC) and my main bearing went out, made my oil look like it had fairy dust in it and not the kind to make you fly plus I had metal chunks sitting in my oil pan. The dealership ordered the first engine for me and it was a complete engine strapped to a crate, looked like it just came off the assembly line it was so clean. I knew there was something wrong before they put in my car and I was right. The engine overheated and blew out thick white smoke. The second engine I never seen, but was told it looked not as pretty as the first and also came strapped to a crate fully assembled. I know my dealership literally unstrapped it from the crate and strapped it to my car. Right now I have all kind of problems, the engine is overheating but not blowing out white smoke, I have a P1056 code before and after the IAC was replaced by the dealership and last but no least the idle keeps surging and hangs between 1500 to 2000 rpms and they says there is no vacuum leak. I have no idea where or whom from they received the engine from. Mr. wmburns please let me know what you think about my situation too and apologize if I am stealing the OP thunder.
 
IMO the odds favor the source of the P1056 DTC code is a wring harness fault. This goes double a huge repair such as a motor swap.

>>
P0156 - HO2S Circuit High Voltage (HO2S-22)
  • Pinched, shorted, and corroded wiring and pins.
  • Crossed sensor wires
  • Exhaust leaks
  • Contaminated or damaged sensor
 
I have a buddy who is a ford mechanic and willing to help me but yes we will be doing the work ourselves. I wouldn't really know what to look for as far as components needing to be replaced or being worn out or anything like that. We've got a family mechanic who also specializes in ford who could probably do this too, should I just bite the bullet and pay him to do it or attempt myself? I keep looking around online for engines but everywhere i find reviews that sound like a nightmare...any reputable sources out there for engines even if its a little more pricey? I don't wanna go for the "good deal" just to have it blow up on me again. Thanks for your response though. Unfortunately at least here in CA any vehicle this old has been exempt from reporting the mileage for a while so it isn't that reliable of a way to gauge it. I may give the yard a call tomorrow and see what kinda vibe they give me and if they can send some pics of what they have.
 
Okay got the car back and it hangs around 1500 to 2000 rpms before dropping down to 850 or 900 rpms after I came to a stop at a light or stop sign. Now here is the kicker, when I run the A/C it doesn't hang and runs normal, my car idle at 750 instead of 850rpms. The dealership mechanic told the supervisor, when he ran the car and had the IAC unplug the car ran normal and the rpms didn't hang but then again, I cant drive the car around with my IAC unplugged. They said if they will have to check all the wires and check the ECM to find the fault but I will be charged for the hours. Since the wiring and ECM has nothing to do with the engine swap, they swap engines and not wire harness and or ECM. If they pinched the wires in the harness they pay the cost but if its not a pinched wire; meaning the wire has a short or ECM problems then I a pay out of pocket. These are the same people who told me after the first engine swap that I need a new alternator. I told them I didn't have alternator problems before I turned it in and come to find out told them to check the wires. Long story short one of the wires that ground the alternator was not grounded right and after that all was good. Please tell me your input
 
Also I found a decent deal on a used 98 4.6 motor with "vin x" not sure what that means. Would that be a direct bolt up replacement?
The 8th digit of the VIN is a code for which motor the car has.

Just wondering. What do you consider a "good deal"? Try car-part.com or LKQ. Remember that you can use a PI 4.6 Romeo from any 2001+ Crown Vic, Town Car, or Grand Marquis. Remember that Crown Vics were still being made new from Ford until 2011.

Please tell me your input
First. It is NORMAL for a Mustang to idle higher when the car is moving. It is normal for the idle to start out slightly high and then settle down. This is done to ensure the hydro-static power brakes work. But if the idle is OK with the IAC unplugged this all but PROVES there's excessive air entering the throttle body. The usual cause is a vacuum leak.

Here's some more information on how to trouble shoot Idle/IAC issues.
http://www.stangnet.com/mustang-forums/resources/troubleshoot-iac-idle-problems-1996-2004.13/

But my take on it is this. IF you paid a professional to do work, then you should expect a professional product.
 
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The 8th digit of the VIN is a code for which motor the car has.

Just wondering. What do you consider a "good deal"? Try car-part.com or LKQ. Remember that you can use a PI 4.6 Romeo from any 2001+ Crown Vic, Town Car, or Grand Marquis. Remember that Crown Vics were still being made new from Ford until 2011.


If the idle is OK with the IAC unplugged this all but PROVES there's a vacuum leak.

Here's some more information on how to trouble shoot Idle/IAC issues.
http://www.stangnet.com/mustang-forums/resources/troubleshoot-iac-idle-problems-1996-2004.13/

But my take on it is this. IF you paid a professional to do work, then you should expect a professional product.


I know I paid for one problem to get fix and got the car back with a whole new problem, how is that normal. But this is what I am going now and maybe you can help me or other on here. I am going to give some back information and then maybe it will fill out the picture a little so please excuse the miss spellings or poor grammar ( I am an emotional writer ).

In November 2015 bought the used Mustang Mach 1 from a Nissan Dealership(good back story to how it got there) near me after doing intense research and coming to a conclusion that I could not afford 2003/2004 Cobra Terminator, I did not want a GT that I considered among the dime a dozen concept Mustang and the Mach 1 was in my price range and was not considered a dime a dozen type of car being that only 9,000 was ever made between 2003 and 2004. The car was in good condition and drove good, but being this was my first Mustang did not know what to expect and what not to expect. After my purchase did more research and took it to Chris at Excessive Motorsports. He told me from the catch that I needed to replace my clutch and I had leaks coming from my oil drip pan seal and rear pinion seal, which is normal for a car that has 110,000 miles on it. I did buy an after market warranty from the dealership and got the leaks fix at Sheehy Ford no issues. I had the clutch replaced ( EXCEDY 400 STAGE 2 ) by a friend who was pretty cheap and used his own tools and lift. A few thousand miles later, I replace the front rotors and brakes myself and since I have the car in the air I do a once over for leaks and noticed driver side axel seal small leak and small leak by my oil pan where transmission housing meets the back of the engine. So I take it to Sheehy Ford again (this all happened around March) and they started to work on it. Then I get the dreaded news, we found metal chunks in your oil pan. (There is more to it than that but like I said short story). They tear my engine down to find the source of the metal, it came from the bearing that is attached to my harmonic balancer and timing chain. Ford says I need a new engine, because my oil looked like a silver glitter show. The first engine was a bomb, it burned coolant and over heated. Now I just got the second engine and it is almost August, Ford has had my car since March (yes do the math).
 
This took place a few weeks back:

I don't know were to start. I got my car back and OMG my engine is not straight yet. When I received the car two things off the bat was not right. One my shift handle that is held together by two bolts to the transmission stick, was so loose it flopped around as I shifted. When I took off the leather boot, the two bolts was so loose I could hand tighten them. I tighten them and notified the service supervisor of my find and he went to scold the person who put it together. The second thing is my idle was surging from 750 rpm to 1000 rpm in a slow beat type of manner. When I drove it and came to a stop light or stop sign, the rpm would hang right below 2000, then drop to 1500 and hold a second or two and finally drop to a 1000 and start surging again. Then the engine light came on and got a p1506 code. Told the dealership and they said that is your IAC going out or gone and that has nothing to do with the engine they put in. My thinking is, well my car sat for 5 months in the elements and it went bad or it was on the engine they put in the car and bad from the start and didn't replace it as they did their test and such. So I bought the IAC valve from them and put it on myself. The car acted a little better but I did get a code later on, and very slowly surging now between 850 rpm and 1000 rpm and hangs at 1200 rpms and drops to a 1000 rpm. Then my A/C went out the next day, oh I didn't mention that when I first turn on the car and the engine is cold, it makes a shrieking sound that comes from the belt or bearings in the one of many pulleys that could be going bad. Yes did that the next day after receiving the car and it had a chance to cool down. I know they knew about it, but never diagnosed and or was not told about the engine or belt making noise. After the car warms up the noise goes away but if I gas the engine hard and or go past 4000 rpm while at idle it will make a little shriek noise again at that time and stops as the rpms goes go down. So got the A/C fix at Firestone and some of my car issues stopped. They noticed the squealing noise and put on a new serpentine belt, the squealing noise stopped. Once they put on the new A/C compressor, my car idled normal at 750 and not between 850 and 900. Plus the hanging of the rpms at 1200 stopped as well. Now I have A/C and I can drive longer and get on the highway. That is when I noticed my other problem, hesitation and loss of power. So much loss of power when I started off from the light and needed to make right, a Toyota Prius PULLED HARDER AND FASTER THAN ME AND I COULD NOT GET IN FRONT OF HIM, as I floored the petal, the car hesitated, stuttered and or misfired with low or no power. When I was on the highway in 5th gear going 70mph at 1800 rpms. I floored the gas pedal again and the car did nothing except shook a little as I felt it misfire once or twice but never gave me a code, I remained at the same speed and the rpms remained the same as well. Now I know something is wrong. I promptly took the car home and was in for the night, the next morning I was going check the oil and start doing checks on the engine. When I looked for the dipstick I could not find it, because the dip stick was broken off and down in the tube. Funny I did not give them the car in that condition 5 months ago. Plus the dip stick tube that has a bracket and normally bolted to the engine was not bolted to the engine. The brackett was there and the bolt was there too sticking out from engine where it screws in at, however the pieces were not bolted together. I was very upset from seeing that and now I can only assume my car has oil because the engine has not seized and my oil pressure gauge is reading normal. Then I go to pull the spark plug to check the gap and the conditions of the spark plugs which were new when I gapped them and put them in prior to turning the car in to the dealership, by the way I used NGK TK6 gapped between .48 and .50. When I pulled the first spark plug, I lost my mind and had to rub my eyes to make sure I was seeing what I was seeing. I pulled out a Motorcraft sparkplug 55E that was very worn and had an diode or the metal tick that sticks up and out very worn, to the point it had lost its shape. Then later my car started over heating and the bracket that holds the radiator fan to the radiator, started shaking and making noise when the fan came on. I left a long voice mail to the supervisor, and called him this morning. He stated to me already that he had ate all the labor to taking out the first engine and putting in the second engine and reminded me several times of that (the dealership bought the engine from this company that had this AWESOME WARRANTY, except the warranty starts after 501 miles is driven on the engine first. The first engine never made it 1 mile it overheated and blew white smoke from burning coolant. Basically the dealership had to eat the labor cost of working on two engines and I was constantly reminded of that). The supervisor said he will fix the oil dip stick tube, replace the dip stick, replace the sparks plugs with Motorcraft sparkplugs and see why its overheating and making the rattling noise. I will turn in the car today or tomorrow and give an update when I get it back. After our conversation the supervisor was not happy with me or with the situation that has taken place. The dealership has their own warranty that anything they work on has a 2 year parts and no cost labor for their work I believe, because they re-fixed my oil pan gasket and did not charge labor and parts for a job they had to do a second time. So we will see what happens next, as far as now any thing I want to do to the car is not on hold until I know the engine is good to go
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THIS TOOK PLACE A FEW WEEKS AGO: here is an update. Pretty much what I have been saying on the forum I put in a two page 7 paragraph format and emailed the service manager. Later that day I drove my car up to the service section, once the general manager knew I was there he greeted me and apologize for the troubles I been through and stated I should have never received the car in such a horrible state. Plus the service manager came out and was taking notes and taking pics of the broken dip stick (stick) and the non-attached dip stick tube. The general manager was very upset and I was told they will fix everything and make sure the car will be working in tip top shape before I get it. So this is their second chance to make everything right and for the first time I did not hear ( YOU KNOW WE AT LABOR COST, SINCE THE ENGINE WARRANTY PEOPLE FAILED TO PAY FOR LABOR). The first time they worked on my car, they did a wonderful job and there was no complaints only compliments, that is why I came to them again for a second time when my engine was showing trouble. Their star mechanic who worked on my car....... well they were very surprise that this was his end product of service and that he has never performed like this, so I was told. I believe everybody should be able to prove themselves when they know they made a terrible mistake. I am not here to bash anyone or any service just tell my story and listen to any good advice that is given

UPDATE FROM LAST WEEK:

this is an update and it gets really funny. They fixed the oil dip stick tube, fan shroud ( by the way they say they did not take out the fan, so I had to pay out of pocket and they didn't charge me labor only parts), and new motorcraft spark plugs. They said they don't know why the new IAC is giving me the high revving and hanging of high rpms. The did notice that if they run the engine with IAC unplugged the engine runs normal and idle is normal as well. Except I get a P1504 code and not a P1506. They said it might be two things; one the wire harness has a short or not grounded properly or two needs a new ECM. What ever path I take I will have to pay out of pocket because none of these things has nothing to do with the engine and was not taken out of the car. I wrote an email to the service manager stating that I had to unplug my IAC because the car would surge and or stay at 2000 rpms and I almost rear ended two vehicles, so unplugged for safety concerns. I feel as thought it its not the ECM, because I never had this problem before hand or an idle problem. I believe it is a wire harness short, but not due to ware and tare but from the wire harness being taken off the original engine and put on the first engine. Then was again taken off the 1st engine and put on the second engine. My car has had 3 engines in it and each time the wire harness had to be fully removed and put on more than a few times. I wrote out the long email to the service manager, only to find out he either quit or got fired. Back to square one on getting help with my car. I have my car now and its a shame I turned it in for one problem and got it back with a whole new problem. Everyone has their hands out for more money to look into it, does anyone have this same problem, if yes what was your course. I am today going to go to the dealer and get the vin code for the second engine and start doing my research on it and go from there. If its a 2004 engine could that be why I got the crazy idle, I know they did not remove the sensors of my old engine and put on the second engine. Would my ECM need an updated flash if it is a 2004 engine. Does anyone know or can help me in this question.

NOW CURRENT UPDATE:

I believe its the wire harness and not the ECM. But I refuse to pay the money to pay them to find out its the wire harness. I am sure if its the dealers fault, they are going to say it was ware and tare and have me pay for it, so they can re-coop some of the money that was lost from labor for the engine people not paying them to take out the 1st and putting in the 2nd engine. Every time except one time, when I took the car back to have them fix it for something they messed up I was told, " YOU KNOW WE HAD TO PAY FOR ALL THE LABOR OF TAKING OUT THE 1ST ENGINE AND PUTTING IN THE SECOND ENGINE" which basically tells me between the lines as a customer, why are you complaining about the work we did to your car you should be happy you even got back from us in one piece. UPDATE: I went to the dealership to get the VIN number from the 2nd engine they said they don't know and don't have paperwork that has the vin number. I am asking you and anyone with knowledge, where can I look for the VIN on engine.
 
There is no VIN number attached to any modular motor. This includes motors in new cars from the factory or crate motors.

There really isn't such a thing as a "numbers matching" car anymore.

IMO the only case where the dealer could give you a VIN number would be IF a salvage motor were used.
 
There is no VIN number attached to any modular motor. This includes motors in new cars from the factory or crate motors.

There really isn't such a thing as a "numbers matching" car anymore.

IMO the only case where the dealer could give you a VIN number would be IF a salvage motor were used.

Thank you for the answer, so what you are telling me I could have an 2004 motor and my ECM that is 2003 may not be reading the sensor right or there is not such thing.
 
so what you are telling me I could have an 2004 motor and my ECM that is 2003 may not be reading the sensor right or there is not such thing.
I'm not saying any such thing. I'm trying to point out that when a new car is made from the factory there's nothing on the motor to match a specific motor to a specific VIN number.

There are TONS of people out there that have put motors from a different model year (and even a different car) successfully into their Mustang (including myself). The PCM can not tell the difference between two long blocks that have the same set up using the correct sensors and wiring harness.

At the risk of sounding rude, I don't really understand what the current problem is and what the forums can do to help you. Are you looking to "fix" the problem yourself or complain about the dealer? If the aim is to fix it then will need a fresh description of what the current problem is.

I have to agree with your previous comments that the problem may be wiring related.

I'm a big believer in covering the basics. I'm also a big believer in Occam's razor. What this means is start first by looking for a simple cause for your problem. Basics first. Then go where the tests point.

https://en.wikipedia.org/wiki/Occam's_razor
 
Mr. Burns thank you for your time, yes I am complaining about the dealership and yes I am trying to fix the problem with the least amount of dollars leaving my pocket. To make a very long story short, in my original engine the main bearing that supports the crankshaft were the timing chain and harmonic balancer is located failed and left large chunks of metal in my oil pan. The dealership said we will get you a used engine with less mileage (current mileage on car 134,000) and it will be no problem we do this all the time states the service manager. 1st engine come in, they hook up and it spews white thick smoke and overheats, plus I was told my alternator is not working properly. I told them to check again because I never had an alternator problem until now. They did and found out one of the wires was not properly grounded from alternator to the engine. They sent the 1st engine back and now have the 2nd engine in my car. Mind you I was told that parts from my original engine was placed on the 1st engine and they sent back the 1st engine before taking those parts off and used some parts from the original and 1st engine to put on the 2nd engine. I get my car back and the idle is high in the 2000s and get my first PCODE: 1506 (mind you again I never had an idle issue until now, when told to the service manager looks at the ground and puts his hands up). The service manager says you need an new IAC and will have to replace it on the engine but that will cost you because we have nothing do with that. I bought the IAC from them and put it on myself gasket and all. Car's rpm still hung at 2000 and slowly went down, as I drove it, it got worse and my car started overheating and when the fan kicked on sound like my engine was falling apart. Took it back to them (also what I forgot to mention is the dipstick was not attached to the engine and dipstick was broken down in tube so couldn't check the oil and I had put brand new NGK TK6 sparks plug before turning in the car and found Motorcraft 55E worn down old plugs in the engine). With all that said they fixed the oil check stick and tube and put brand new sparks plug (Motorcraft), they found that my fan shroud was breaking apart and my fan was smacking the engine. They said taking the engine out has nothing to do with the fan and they never touched it, so I paid for the fan only and not the labor. When I asked them about P1506 code they said, they will look into it but its going to cost me money because they took out the engine and never took out the wire harness. They also said that it could be a wire harness issue or might need a new ECM, but anyway you swing it I will have to pay out of pocket for one or both. What makes me mad is I turned the car in for one problem and get the car back from the DEALERSHIP with a whole new problem and everyone is saying not our fault pay me to fix it. One of the reason they were not so accommodating near the end, the warranty company for the engine refused to pay for the labor of taking out the 1st engine and putting in the 2nd engine. The warranty company stated that the first engine has to be driven 501 miles to enact the warranty. Since the car never made out of the bay it didn't even go 1 foot, the dealership ate 2000 dollars in labor and was nickel and diming me to not loose any more money instead of giving me quality service I deserve. Plus the service manager did a smoke a test and no leaks and stated that with the IAC unplugged the car runs normal, except the P1504 code meaning the throttle body is not reading the IAC. So now I drove it around with IAC not plugged into the wire harness and cars drives normal and idles normal too. UPDATE: got engine warranty people info and found out about my engine that is in the car now. The engine currently has 52,000 miles and came from an insurance sale, meaning they bought a totaled car from the insurance company. Plus they made sure the 8th digit in the vin was a "R", meaning the engine came from a manual transmission Mach1. I have to google or if you know where I can find the block stamp. The guy told me if my engine is a 2003 it will have block stamp (3G301AABB) and if a 2004 engine block stamp (4S301AA). I am asking how to test the wire harness myself for a short or test the ECM to double check and were do I look on the engine to find the block stamp. That is pretty much in a nut shell of what has happened and what I am trying to do, I do appreciate your patience and understanding in trying to help me, every little bit helps.
 
WHICH motor wiring harness was used? The one that came with the car or some other? IF the wiring harness from a different model year (or even a different car) were used this could be part of the problem.

Please review post #8. Let me say it again. This motor will NEVER idle correctly if it still runs with the IAC disconnected. The motor MUST die or at the least run with an abnormally low idle with the IAC disconnected.

Here's some more information on how to trouble shoot IAC/idle issues.
http://www.stangnet.com/mustang-forums/resources/troubleshoot-iac-idle-problems-1996-2004.13/

Please read the above information. Pay special attention to HOW the IAC works (by adding bypass air) as this is vital to correctly trouble shooting the problem. Also pay attention to the role that the TPS plays in sending the correct closed throttle signal to the PCM.

Consider investing in an ODB2 scanner that is capable of monitoring operational data. Having this might actually make real short work of this problem. At the very least it would stop some of the guess work to what the PCM is seeing.

One additional note about the DHOC motor. The DOHC is VERY DIFFICULT to correctly bleed the cooling system. So difficult in fact that many people will say that it's impossible to bleed without a vacuum fill kit. Why is this important? Because air trapped inside the cooling jacket of the DHOC motor is a prime reason for over heating.

Good luck.

>>From Ford service manual.
P1504 - Idle Air Control (IAC) Circuit Malfunction

This DTC is set when the PCM detects an electrical load failure on the IAC output circuit.
  • IAC circuit open
  • VPWR to IAC solenoid open
  • IAC circuit short to PWR
  • IAC circuit short to GND
  • Damaged IAC valve
  • Damaged PCM
The IAC solenoid resistance is from 6 to 13 ohms
<<

Note, A P1504 is a very different DTC than a P1506. When ever the PCM calls out a "circuit malfunction" this means that the circuit is not working at a basic electrical level. Note under the symptoms the possible "extra" signals, power, grounds, and shorts.

Also note there may be more than one problem. Why? Because regardless of the wiring to the IAC, the motor should still slow down when the IAC is disconnected. So perhaps there's a vacuum leak as well.

Note, don't limit trouble shooting to the IAC valve itself. The problem "could be" in the wiring to the IAC or even the connector. In fact because the IAC is new and the amount of work done to this car, the odds favor a wiring "issue".

Many tests of the wiring harness can be done with a simple Volt-Ohm Meter (VOM). Obviously having an ODB2 scanner that can monitor operational data is much more powerful.
 
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The wire harness from my car was used all they did was disconnect it from the engine and never from the car, that is what they said to me and I mentioned that in one of my post above.

I reread post#8 and yes with the IAC unplugged from the harness the engine idles normal and runs normal. The very second I plug the harness wire to the IAC the engine immediately revs ups to 2000 rpm and stays there and the engine is already warm and was previously idling around 800.

They re-bled my system and fixed the over heating problem, I read everything you said and will go from the cheapest to the expenses, I have an OBD II reader but the real cheap one that tells you the code and lets you delete them. I need the real time OBD II reader that lets you see what the engine reading. Thank you once again and for being patient. I guess my dealership lied to me when they said they did a smoke test and there was no smoke escaping, but according to you, if I did NOT have a vacuum leak with the IAC unplugged from the wire harness, my car should die immediately not run normal. When I plug the wire back into the IAC, the engine is trying to run normal and the IAC is now doing its job and letting air into a system that has to much air because of a vacuum leak. I will go from here and keep it updated, plus I was planning on buying one of those BAMA Turners, would that let me read what my ECM is reading in real time when the engine is on.
 
if I did NOT have a vacuum leak with the IAC unplugged from the wire harness, my car should die immediately not run normal. .
In the interest of being exact, I said that too much air is entering the throttle body and the usual cause is a vacuum leak. However, the problem could also be that the idle set screw has been set too high. Or the wrong throttle body butterfly has been used (incorrect bleeder holes). Or the throttle body is binding and not closing all the way. Or the throttle return spring is broken or weak. Get the idea?

Also note that it is possible to have a vacuum leak and still pass a smoke test. Examples include a problem in the EVAP purge system.

My point is don't let your thoughts about the dealer blind you to the possibilities. Or assume that everything the dealer tells you is not true.

From your reply above I'm not getting the sense that there's a complete understanding how the IAC works. The IAC can only add air. When the IAC duty cycle is zero, then all adjustment is gone. The IAC simply can not remove air. Hence the reason why the motor must idle slow (or die) when the IAC is disconnected.

IF plugging the IAC in immediately causes the RPM's to go to 2000 and stay there I would start by looking for a ground fault in the IAC signal return line. This would force the IAC duty percentage to be 100% all of the time. This would also cause a circuit malfunction DTC. Again this is only an educated guess. Tests should be done to either rule in or out the theory.

It is possible to do some tests with a common and cheap Volt-Ohm meter (VOM). For example by measuring the voltage across the IAC one can get an idea of the IAC duty cycle. In a working motor, this voltage should change as the PCM attempts to adjust the idle. What the voltage is doing gives clues. Being 12 volts, zero volts, or never changing are clues to what's going on.

Don't discount the value of a good physical inspection using a low tech tool such as the Mark I eyeball. I have fixed many a wring problem by simply looking for evidence of physical damage to the wring harness.

https://en.wikipedia.org/wiki/Visual_inspection

If asked for an educated guess, the real problem is with the IAC circuit itself. When the dealer finished the motor install they couldn't get it to idle. So the idle stop screw was adjusted up just to keep it running.
 
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In the interest of being exact, I said that too much air is entering the throttle body and the usual cause is a vacuum leak. However, the problem could also be that the idle set screw has been set too high. Or the wrong throttle body butterfly has been used (incorrect bleeder holes). Or the throttle body is binding and not closing all the way. Or the throttle return spring is broken or weak. Get the idea?

Also note that it is possible to have a vacuum leak and still pass a smoke test. Examples include a problem in the EVAP purge system.

My point is don't let your thoughts about the dealer blind you to the possibilities. Or assume that everything the dealer tells you is not true.

From your reply above I'm not getting the sense that there's a complete understanding how the IAC works. The IAC can only add air. When the IAC duty cycle is zero, then all adjustment is gone. The IAC simply can not remove air. Hence the reason why the motor must idle slow (or die) when the IAC is disconnected.

IF plugging the IAC in immediately causes the RPM's to go to 2000 and stay there I would start by looking for a ground fault in the IAC signal return line. This would force the IAC duty percentage to be 100% all of the time. This would also cause a circuit malfunction DTC. Again this is only an educated guess. Tests should be done to either rule in or out the theory.

It is possible to do some tests with a common and cheap Volt-Ohm meter (VOM). For example by measuring the voltage across the IAC one can get an idea of the IAC duty cycle. In a working motor, this voltage should change as the PCM attempts to adjust the idle. What the voltage is doing gives clues. Being 12 volts, zero volts, or never changing are clues to what's going on.

Don't discount the value of a good physical inspection using a low tech tool such as the Mark I eyeball. I have fixed many a wring problem by simply looking for evidence of physical damage to the wring harness.

https://en.wikipedia.org/wiki/Visual_inspection

If asked for an educated guess, the real problem is with the IAC circuit itself. When the dealer finished the motor install they couldn't get it to idle. So the idle stop screw was adjusted up just to keep it running.


UPDATE:

Here is the kicker, I have 135,000 miles and noticed that when the engine is cold I have power and no hesitation after driving for 40 mins and or the engine has fully warmed starts the hesitation and no power in the lower rpms. For example going 50 mph at 1200rpm in 5th gear. The engine misfires but not enough to cause an engine light. After doing research came to the conclusion I needed to finish my tune up. It has new sparks plugs, fuel filter, cleaned out the throttle bottle, MAF and last but not least put in new coils. After putting in the coils the car runs so much better as if I put in a new tune. No more hesitation and lost of power, purposely get stuck in traffic just to make sure the engine was nice and hot. Still no power lost or hesitation when stepping on the gas. Here is where its get weird, I decided to hook up the IAC while the car was running, last time I did that the rpms shot up to 2000 from 850. This time it stayed at 850 and did not shot up and when I drove the car around the rpms did not hang at 2000 or 1500 and slowly drop. In fact the idle rpms acted normal and when I was down shifting to slow down as soon as I push in the clutch if the rpms was at 1200 they shot up to 2000. Now when I do same thing to downshift and use the engine compression as a brake, the rpms do not shot up anymore. However with a new IAC I am still getting P1506 code. Thanks to Mr.Burns I am going to follow that link to figure out the IAC and will update so if anyone has the same exact issue hopefully they wont have to re invent the wheel. I have a year to figure out or I am not going to pass my safety or emission test for VA.
 
I was reading the threads in the link, does my throttle body come with a screw that can manually control the idle, I have read about the SN95 Mustangs having one, just wanted to know if my Mach1 has one, thank you and apologize if this has been answered before.