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My 91 740 automatic did the same thing. I replaced the fuel pump relay (on a circuit board behind the ashtray), and it solved the problem cheaply. I believe I paid $15 for a new relay on the web. It just plugs in. I saw several testimonials about this on the brickboard while I was researching the issue.
Apparently, the solder joints in the relay crack after about 10 years. When a solder joint opens up, the fuel pump shuts down. The fact that your tach showed 3500 until you shifted into neutral points to a fuel starvation problem and not an electrical problem.
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