Darren,
I'm no engine expert so I'll leave the input on that to the many people on this forum who know what they're talking about. I will say that your thoughts on the exhaust make sense.
I've owned a '90 5.0 Mustang for over 10 years now. I don't drive it much these days but I put almost 100K miles on it when it was my daily driver. You undoubtedly know this already but aside from bumping the timing and installing a K & N filter, the first thing everybody did when those cars were new was to change out the entire exhaust system. Those mods, plus steeper rear gears, were usually all that was needed to put an otherwise stock Mustang well into the 13's, so there's got to be something to the engine's perceived need for a less-restrictive exhaust.
Anyhow, I sympathize with you on the dyno issue. I know that every dyno is different, and you can get readings all over the map, etc., etc., but it still sucks when it shows less HP than you were expecting. My Mustang has all kinds of stuff added to it: a bigger throttle body, 1.6 roller rockers, bigger mass air meter, underdrive pulleys, nitrous, a Paxton blower, MAC long-tube headers, off-road H-pipe, Flowmasters, 3.55 gears, subframe connectors, etc.
At one point I bought one of those G-tech performance meters and made several passes with it. It was before I installed the Paxton or the nitrous, but after I had spent huge amounts of time making all of the other mods, and I was expecting to see HP numbers in the high-200's. Imagine my dismay when the best number I could generate was something like 195 HP! I was sure MY G-tech must have been off, so I borrowed another one from a friend, with similar results. I was pretty bummed, to say the least. In fact, I think I ordered the Paxton a few days later...the need for HP is a slippery slope.
Bob