I also think something is wrong. Not just the high overall gearing. A bone stock 428 CJ Mustang would run about 14 flat at over a 100 mph with a close ratio toploader and 3.50 gears. I'm sure the launch required some deft clutch work, but still it would no doubt fry the tires.
My first thought was timing. The curve does sound too fast to me, but that shouldn't kill the low end. Doug had a good point about detonation with the quick curve. That could be exacerbated by the high overall gearing. The total timing sounds low to me for factory heads, though rockhouse66 says it was set on the dyno, and he's experimented with it. I would have expected 39-40 degrees total timing to make the best power.
I think you should concentrate on ANY differences in the engine between the dyno and the installation in the car. Fuel supply was mentioned. Exhaust was mentioned. Are you sure the timing is still right? Balancer slipped? Different coil in the car than was used on the dyno?
JMO,
paulie