If your belt is flexing that much, I would start with a new timing belt. Early 1uz's are non-interference so if it snaps or gets too sloppy, you wont have to deal with broken valves. You could be experiencing excessive advanced/retarded timing and once you hit 1500+ rpm... the belt is streaching and throwing the timing out the window. Check the timing belt, timing tensioner and timing idler for wear and play.
I just bought a salvaged 92 sc400 and im dealing with a lot of electrical issues myself. The idiot who owned it before me had every fuse changed for incorrect values so stuff is popping everywhere!
Hey did you ever have to deal with a broken HVAC controller? If I jump 12v to the controller, I get all climate control functions but cant find out why it wont see power. I looked up wiring diagrams and it states there is a major junction block for the hvac controller and its the only tap/connection for the entire HVAC circuit so I know where I need to look, but cant find a diagram stating where this connection is located? I get a picture showing it located behind the cluster but there isnt anything behind it.