Scott,

I'm with David on this, the tach dropping suddenly to zero means a loss of pulses on the primary side of the coil. Also clean and tighten all the coil contacts. On my '86 several of those spade connectors had oxidized and were not making the best contact.

You may have more than one problem, however, contributing to your set of symptoms. Unfortunately, your '88 may have the biodegradable harness problem (I'm not quite sure which year they solved that - perhaps others will jump in...) and the signal may be intermittent due to engine movement during strong deceleration. How are your engine mounts/tranny mount?

Perhaps the engine rpm sensor on top of the bell housing may be faulty, or the wiring from that sensor to the engine computer is intermittently failing.

I would also check and clean the 25A fuse on the inside of the left front fender. I know that it has caused some intermittent problems in the past with my '86 240. It looked good but had developed an oxide layer that did not make good contact. Scraping off the oxide and cleaning it made an improvement to mine.

Also, do the FFFPRRS - Famous Foster Fuel Pump Relay Re-Solder (or replace) as it is "clean and easy work, $0" and if it isn't contributing to this problem now, it will someday in the future if you don't pre-empt it! ;)

Those are just some ideas, admittedly guesses, but hope something works for you.

Good Luck!

TomD
'86 240
'93 240