7.5 MPG and no power

The 350 with TBI wasn't a mileage engine but 7.5 is low even for them. Does it have the towing package with low gearing? If you are driving along on a flat road and just drop the transmission into neutral let off the throttle and don't touch the brakes does it seem to roll free? Beyond brake drag or the low gearing the other item would be the OEM exhaust, they are very restrictive, True dual exhausts on them makes a big difference.
Then you want to look at the rpm's when in gear and see if they stay steady or if the transmission is slipping.

A blocked catalytic converter could cause poor mileage but that would usually show up with higher engine temperatures, it's possible the O2s are getting old and reporting wrong, or if you were seeing the engine not warming up you might want to look at the coolant temperature sensor, if it thinks the engine is running cool it will increase the fuel to it similar to the way a choke works. If you can find an old scan tool like the old snap on brick MT2500 with the correct cartridge or an OTC Genisys it would let you look at data the PCM is seeing. Those are good on pre- obd II vehicles and many cover up to 2008 for the SO and 2013 on the OTC. Handy to have for the older vehicles.
Removing the catalytic converters on that truck will cause issues, not just a CEL but it can cause a lack of back pressure that can make the system act strange.