The real headers are cool. Are they stock or did someone swap them on as best as you can tell?
The most common turbo control I've seen that acts the way you're talking about is simply a manual wastegate. All a wastegate does is bypass the turbo after a set amount of boost has been reached. I'm sure there is a setup, either electrical or mechanical, that you could find. My first experience with them was in a Cessna 210T that had an additional control besides mixture, throttle, and prop speed (angle really.....). They must be reliable as the FAA seems to have an issue with anything even remotely unreliable being in the air. I guess this is why there is such a good supply of low hours lycomings and continentals out there for air boat enthusiasts.
The knock sensor thing would be cool with the megasquirt. If your 366 has HEI (and it probably does), the ignition mods available are just about limitless and it would appear from what I've read that the megasquirt is well suited to this system. Just out of curiousity, where did you fine 85 octane at an elevation of 5000 feet? The only place I have seen it is in the "low" areas of Montana and it scared me a little. My little 22re in my truck knocks enough as it is...I don't need 85 octane with 9.6:1 compression, aluminum head or not
A cool aspect of the megasquirt that I see is that you could tailor the system to run on E85. The only real fuel system mods required are running alcohol resistant fuel lines and replacing any rubber parts that might be affected. Personally I'd just change the fuel lines and see what happens. With E85's 103-106ish octane, you could really run some mean advance. I think that might get you some more power. Sure it doesn't get the same mileage as dino fuel, but last time I calculated it out with our local pump prices, you could lose somewhere around 35% of your fuel economy and break even. I haven't done the calculation in a while.
The system could truly be dual fuel even. The megasquirt seems to have provisions to adjust just as the new cars do for the fuel. An additional sensor is installed that simply calculates the amount of oxygen in the fuel with pure ethyl alcohol having much greater amounts of oxygen than gasoline. If you set a max and a min timing and fuel map, I would imagine that computer is capable of interpolating from there for various contents. That combined with the various other sensors like the knock sensor could really help wake things up. Just an idea though....certainly there's work involved with it.