John - the spout connector is on the engine near the distributor, a little pigtail off the wiring that goes to the TFI thingy. The spout is a jumper plug that fits into a socket on the pigtail, such that when the spout is in place, it completes a circuit that allows for the computer to advance the timing. For tuning purposes, you can pull the spout jumper out and the timing stays locked at intial setting. My mechanic agreed that 10* initial was too conservative for the 5.0 and set mine to 13* instead. When emissions test time comes around, I simply remove the spout and with no advance my NOx stays within limit.

If/when you do get around to a new exhaust system, might help to know that I think that my car would have no NOx issue if my cat had the correct air injection port for the second stage (tiny nipple at middle of cat for air tube hook up). My air injection tees into the exhaust just upstream of the cat and thus the NOx doesn't get reduced enough in the second half of the cat.

-Boozer
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88 760 wagon 5.0 & AOD