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6.5 dead in water, please help

Have you checked to see if the fuel shut off solenoid is working?Often just holding it while a helper cycles the key to run should give you the feel and sound of a "click".

The FSO and PMD/IP fuel solenoid are both powered by the same fuse also so check your fuses(on OBDII it is called fuel sol fuse-not sure about OBD1).
 
Just to pile on my 2 cents.
My truck did something very similar, (loss of power/died under load, white smoke and could barely get it to rough idle if I punched throttle, wasn't throwing any codes).
I swapped to known good PMD, redid the fuel filter and fuel lines with clear lines to check for air in fuel, (which it acted like), and cleaned all the grounds/fuses, nothing fixed it.

Check your Optical Sensor.
It is on top of your IP by the fuel shut off solenoid. There is a plug coming out of it facing towards the rear of the truck, black plastic little box/turret right on top of the IP.
Just unplug it, and it should fail over and use the crank position sensor as back up. Mine threw a load of codes but started right up and ran fine. I replaced the sensor and it fixed it.
Here is a walkthrough for replacing it, but I would just unplug it first to test, easy and quick. If it starts up you know it's your problem, if not it's back to the drawing board.
 
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