Engine tops out at 3000 rpm

I think the first check in my book would be the distributor advance.   Make sure it is working, free and smoothly. With no advance an engine will not run even close to full performance.   There are several threads on this forum that discuss this.   With a timing light hooked up you should see your timing at idle somewhere around 10*, as you increase RPM you should watch the timing mark advance, it should max around 34* advance somewhere below 4,000 RPM.   It needs to advance the same each and every time and be very smooth.  Any rust in there keeps this from working properly.   A very common issue in boats.  While in there check the springs to be sure both are in good shape.   If you have a timing light this is a 10 minute check start to finish and if nothing else it lets you know what to rule out.

So I ran the engine on dry land to check the distributor/timing advance. Per usual for me, the engine seemed to run fine today. Sounded better/smoother, could rev it up to 3600 RPM.  Either this means the issue is intermittent or that it behaves different with no load on the engine.  

I think it's safe to say that timing advance isn't your issue and your damper has been that way for years so it's not your issue either. 

Have you changed the points and condenser lately by any chance? My dad had a 302 PCM that started giving him trouble- fought it for a long time. Finally stumbled across the distributor getting corroded between it and the block and the housing not being grounded to the block. Ended up cleaning that and running a ground wire direct from the distributor to the block.  Just throwing that out there since I know how frustrating it can be 

Do you have insider knowledge that he has electronic ignition in a 79? Pop bought his 87 new it had points

Distributor timing appears to be working, as Ken suggested I would look at the cap and rotor for condition and corrosion.   Next I would pull all 8 spark plugs, lay them out side by side, marked as to what cylinder they came out of and study them.   You might see certain cylinders that are not burning clean.   That could be cause by bad plug wires or the cap./rotor.   If it has not shown up at that point and the Points/electronic ignition are good you are moving into mechanical issues.   Heads, head gaskets.   Start with he simple and make sure all the normal tune up stuff is good before anything else.

Keno is spot on!  Had electronic ignition upgrade several years back.

Checked the distributor cap; very clean. Contacts are shiny, with just a small char mark in the upper right corner (all 8). Pretty uniform. Rotor also looks fine to me. I had replaced these, and the spark plug wires when the engine was re-built. Since I pulled the plugs, I will replace them just to be sure. Spark plug wires all appeared to be well connected even though distributor cap is quite crowded.