All speculation but I watched my engine dyno'd at KC and for a couple things - they are not running air filters, big headers - no mufflers, I think no alternator to drag, may be using your actual distributor or one they have set up for the dyno.
By the time you put an air filter on it (and if using an original S&H filter it's equivalent for a Yugo), add mufflers, add alternator, and driveline losses - it all adds up. But I would have expected you to get to a little over 400 HP - different chassis dynos produce different results. I would compare the power you were getting at 5800 on the engine dyno report and see if it was within 20% of what you got on the chassis dyno just before it started breaking up. If it's tracking pretty closely up to that point then you just need to figure out what's breaking it up at 5800 rpm.
If it was running lean then the air filter probably wasn't holding it back. You may need to confirm your float levels and fuel pump pressure.
Just noticed you said you used a Mustang chassis dyno. I believe they are one of the units that generally produces a little lower HP/torque readings.