I thought all of the truck blocks were 4-bolts. My '91 C1500 had a 4-bolt 350 in it when I took it out.
I'm not sure what the hell that guy did. If you have the computer controlling everything, the O2 sensor needs to be connected. That is the only way the ECM will do any kind of adjustment to the fueling. I have a feeling that he did all of this stuff to it, connected everything up and it didn't run right. If he disconnected the O2 sensor, the engine will always run in open loop and it will always run rich. I bet your fuel mileage is horrible. It the cam is not computer friendly, that also messes with the ECM because of the huge swings the MAP sensor will report to the ECM. Forcing it into open loop would take care of that.
The two wire sensors are also not too desirable because they have to be hot for them to work. At idle, they cool down and if they cool down too much, they won't report the correct readings then either.
You've got some decisions to make and some more investigating to do. I have a feeling the O2 sensor is unplugged because the cam is not computer friendly. That is just a guess because I have no idea what the cam specs are, but it sounds like the most logical reason to need to disconnect the O2 sensor. If that is the case, you won't be able to run it any better than it is now (and it may even run worse once the new heads are on) unless you have the chip burned again. The EGR isn't there an you don't have a check engine light, so it's likley that the chip has been adjusted. The O2 sensor is just for adjustment, so if the chip was altered, maybe it was altered in a way that does not require the use of the O2 just so it would run. Come to think of it, you don't have a check engine light for the O2 not being connected either, so that may be the case.
The heads are worth maybe 20hp, so you have to decide how much that 20hp is worth to you. Maybe you won't want to change them. Maybe you will change them and it runs good, maybe it runs worse and now you're stuck finding someone to custom burn you a chip for $$$. You might want to pull the ECM and see if they put a sticker on it or something. That could be helpful if you wanted to have the chip adjusted. TBIChips puts on right on the chip. The ECM is behind the glovebox.
I spent big bucks doing all of this myself and hundreds of hours of reading, learning, and doing, and in the end threw in the towel and went to a carb. Mine came down to not being able to get my TBI setup to pass emissions though, partly because I didn't know enough about what I was doing to cheat it through, where the carb makes that a lot easier. Out of the box it ran better than the TBI system I had ever did, though it's still a carb and still has cold start challenges that TBI doesn't have. I also don't have very good MPG's but I didn't build it for MPG's, I built it to haul *** and I beat it every time I leave the garage with it.