We've dyno'd a ton of trucks lately, and it's quite common for moderately tuned up 12v street trucks to lose power as they pull up beyond 3k rpm. It takes an aggressive injection pump, aggressive injector, aggressive timing, and a healthy turbo to make peak power above 3k RPM or at least hold within 10% of peak power out past 3500 rpm.
If the smoke is clearing up, then obviously there is a fueling issue, but once that is addressed, don't be surprised if it still has a noticeable power drop above 3k rpm.
Watch how much the power drops off on this 369sxe turbo test on our 95' test mule/shop truck. Keep in mind it was running mid 20* of timing, has a MAXED 640cc 5K GSK 215 pump w/Bosch peak profile cam (better refill rate with stock injection ramp), Hamilton 182/214 cam, PDD 5x018" sac 145* injectors, 165# valve springs, 7/16" pushrods, upgraded hotrod lift pump, T4 manifold etc.... basically a good hot street truck setup and as good a candidate as any to make power at 3k+ RPM. In short, around 3200 RPM it loses roughly 10% of it's peak HP that was made clear back at 2600 rpm.
[ame="http://www.youtube.com/watch?v=94j-YROdRvA"]http://www.youtube.com/watch?v=94j-YROdRvA[/ame]