Tach breakup at rpm above 3K

[CRF]

Car: 1988 190E Benz running in SCCA ITS
Engine: 2.6L 6 cylinder with CIS-E
Computer: MicroSquirt Module with my own interface board
Timing input: 36-1 via Ford Escort crackcase sensor
OEM coil via BIP 373

I build this system to modify the Benz ignition system only since we are not allow to replace the CIS-E under SCCA rules, and there are no way to modify the OEM ignition curves. The system was develop to work in parallel with the OEM ignition system, with the outputs from both system are run into a relay that sends one of the outputs to the OEM coil. The relay is controlled by a switch on the dashboard.

The ignition system seems to work fine at all rpm ranges, and after adding a few degrees of advance over the factory system, the engine generates more power on a dyno. The default MeqaSquirt dwell settings are used, and the factory coil does not over heat after 20 minutes session on the track.

An aftermarket Sunpro Super Tach II is connected to the negative side of the coil. The tach works fine with the OEM ignition system, but with the MicroSquirt, it only works between idle and 3K, once the rpms get above 3K, the needle goes to 0, or breaks up so badly that it unreadable.

Any ideas what is wrong? Am I running too much dwell?