[kitcarbp]

Geez I have read the responses and also first thought the rev limiter is kicking in before tach, but if it was mine I would try to get a look at the basics, the primary and secondary ignition wave forms first to see if you can get a clue there, otherwise its a guess and you'll blame the wrong part. Is tach working right, are u sure its 4K rpm ? I would also ensure alt output is OK at these rpms and no AC leakage from a bad diode pack that may affect MSD box or the trigger circuit. Not sure how much over-voltage MSD can tolerate but is your charging voltage about 2V above baseline battery V (like 14-14.8V range)? My 1G old school alt runs 14.2V at idle and 14.6V above 2000 rpm as an example.

I was going to say this is an engine load dependent issue but if the 4K rpm ceiling does not happen when tires have bite, I am not sure, because when tires "are-a-smoking" the engine load is going down a bit if revs are staying at 4K. In any case I would double check your fuel pressure is not dropping off due to fuel sloshing away from your tank pick-up during your burn-outs. Can you get a long fuel pressure test gauge and test hose (plumbed at carb) and duct tape it to the w/s during a burn-out to confirm you're not dropping fuel pressure, perhaps you've done this already.

The installation instructions on these MSD and other boxes state the trigger wires coming from the distributor "mag pick-up" need to be twisted to avoid electro-mag interference, my MSD harness I purchased for the DURAspark dist has exactly that, the wires are braided along entire length.

There are three ways to trigger the box, I can't tell from your engine photos but are you using points or mag pick-up to trigger the MSD box?

FROM MSD BOX instructions:
There are three circuits that can be used to trigger the MSD Ignition;
a Points circuit (the White wire), a Magnetic Pickup circuit (the Green
and Violet wires), and a Hall-effect wire (White/Blue). Only one circuit
will be used at a time.
Routing Wires: The MSD wires should be routed away from direct heat sources such as exhaust
manifolds and headers and any sharp edges. The trigger wires should be routed separate from the
other wires and spark plug wires. It is best if they are routed along a ground plane such as the block
or firewall which creates an electrical shield. The magnetic pickup wires should always be routed
separately and should be twisted together to help reduce extraneous interference.
I am Not sure how yours is set-up.

The valve float@ 4K rpm would indicate your valvetrain was designed wrong with the wrong pieces assembled, even an OEM 429/460 won't float valves until well past 5K rpm, not as low as 4K rpm. AND it would float all the time past 4K not just WOT and 1st gear.
I would get back to basics of fuel pressure/MSD box voltage/current IN, MSD box trigger circuit, PRI/SEC ignition waveforms. Let us know what you find.