General Maintenance & Repairs - Desparately need help

I am new to LS1 Tech and new to ls1s in general. I recently bought a 98 Corvette and I am have some issues that not only have me baffled but everyone i have talked to. I hope some one can help me out.

When i bought the car the check in light was on. Preveious owner said it was because the cats were gutted with no sims. The car also seemed slightly sluggish but nothing i thought a good tune up couldn't cure. After purchasing I took it out to really see how it ran. It pulled good up till 5000 RPM then it started cutting in and out similar to a factory speed limiter and then it backfired extremely loud and shut off. It started right back up and ran fine afterwards as long as I wasn't in the high rpms. Eventually the car has gotten worse and now it starts cutting in and out any time i have the motor under a load. Even as low as 2000 RPM. It will also die every time i take a right turn with any speed and i have the throttle down now matter how slight. Every time the car cuts in and out and begins to backfire it shoots flames out of the exaust.

Things i have attempted thus far to resurrect the problem:
First i replaced the plugs and wires. I Hooked it up to a tech2 and the only codes it showed were knock sensors on both banks. I replaced both and checked the pigtail to make sure it wasn't damaged. Then I took it to a local performace shop and had the PCM reflashed with a stock program. Next I took it to my friends automotive shop and hooked it to another diagnostic machine and it showed that the car had 500+ misfires on cylinder 2 and 300+ on #3 and several misfires on other cylinders. Nothing else looked out of the ordinary. I replaced the cam position sensor and it made no difference. I swapped the coil paks from another car and took a short drive. This seemed to cure the low speed hesitation but it still cut out and backfired at 4800. I have checked the fuel pressure and it holds at 50 psi at idle. I raise the rpm until it starts to cut out and it stays at 50. I replaced the fuel filter and it made no difference in the pressure. The car is stock except for a cold air induction, LTH and and Bassani exaust.

I am truely stumped and i'm affraid to just take the car to the dealership because i know they will go through the same steps i have already done and charge me for it. After that i'm affraid it will just become a guessing game and @ $125 ph i sure the bill will be outrageous. This is a beautiful vette and i would really would love to enjoy it like it should be as well as start getting into some performance upgrades. I would appreciate any help or advice.

Someone needs to send this to internal engine or pcm?

Did you check compression in those cyclinders misfiring after the plug and wire change and reflash?

I am guessing from other threads I have seen but if this finds it's way to Internal engine I suspect you will get some good info.

Next I took it to my friends automotive shop and hooked it to another diagnostic machine and it showed that the car had 500+ misfires on cylinder 2 and 300+ on #3 and several misfires on other cylinders.

This right here is the problem.

Now, the only question is, what is causing these misfires?

Odd that the coil pack swap made only a partial difference. I would expect it to either cure the problem or do nothing at all. Maybe just coincidental?.....

Many things can cause misfires like that, including internal and external engine components.

Looks like you've ruled out lack of fuel pressure as an issue. You mentioned backfire, but also flames out the exhaust. I'm guessing you meant afterfire (backfire is combustion back through the intake, afterfire is combustion in the exhaust system). And if you're getting flames out the exhaust, that means combustion is taking place in the exhaust system. This could be due to things such as poor/weak ignition, bent valves, etc. Point is, for whatever reason there is an excessive amount of unburnt fuel getting into the exhaust system.

Do you hear any loud ticking from the motor? Keep in mind that LS1s are naturally noisey motors, but anything sound abnormally loud? If there is no loud ticking, I'd lean more towards an ignition issue rather than a bent valve(s) issue.....

have you tried contacting the original owner to see if he did something dumb with the car? like jam it into first at 50 or 70?