What was changed in the engine to drop the 85 305/215 HP to the 86 305/190 HP. Is it just the ECM? Can an 86 305 be modified to get the alleged 25 HP back?

 

The 190 hp version was a 4 bbl carb engine, the 215 hp was TPI. These options were the same for 85 and 86, so nothing dropped. From 86-on, there were additional/higher h.p. variants, but those don't pertain to your question.