My suspicion would be the TFI module. Ford never should have mounted them on the distributor. Since they help the computer regulate timing, that could be the problem.
It wouldn't hurt to change the fuel filter, those are relatively cheap and a clogged filter will give similar symptoms.
If the cat is plugged it could cause problems with running, but I'd suspect that even if the cat is bad, it's probably not the problem right now.
When an o2 sensor goes bad, the computer usually kicks into open-loop which just means it runs rich and poorly because it's in the emergency run condition. So that's not the problem. I've run BIIs in that state before. They still go ok, just use more gas to get there.
87' bII idles fine, revs up fine..but when I try to drive it it bogs down really bad and every once in a while it seems to catch and run good for a few seconds. Mayybe a cat? Gas looks ok,ignition is all new except the TFI. Also does not like to start without ether..It also has been in some deep water recently.. Seems to have power even while power braking but when I try and drive it I Can't get out of second gear..Maybe ECM? 
Idk..any input much appreciated. Thanks
