Ok, let's get your car straightened out. I have a few things for you:
1. You said new cap, rotor and wires (leads) ... I hope they are Toyota. Only use Toyota parts for these items.
2. I know the NGK Iridiums are big $$$, but get them out of there. Get yourself either the factory platinums or the NGK copper plugs ($6097). If you go with the copper, change them every 3000 miles (they are cheap!).
Do notever use Bosch Platinums.
3. I have no idea what that "Turbosmart" unit is, but I am sure it is not doing "fuel cut".
All you need to get rid of fuel cut, is to cork the vac line to the MAP sensor (black thing above your turbosmart piece). Doing this gets rid of fuel cut and also stops your OEM boost gauge from working, but that gauge is worhtless anyway. You should have a good aftermarket gauge in there that tells you exactly what boost yo uare running. If you look at your set up, simply remove the turbosmart piece and those 2 added red vac lines. The small black vac line before the "T", just cork it. Stick a screw in there and a hose clamp around it. KEEP THE ACTUAL BLACK SENSOR PLUGGED IN ELECTRICALLY THOUGH.
4. You boost controller. Look at this photo:
http://www.pricerightwebsite.com/mr2probs/mr2009.jpg
At the top right corner there is a nipple with a vac line coming right off of the side of the turbo's compressor housing. That line should lead into the MBC (manual boost controller).
I am concerned that the vac line coming off of your turbo is not the same one going into the MBC. It looks like different material. I would follow those lines and make sure they meet up somewhere. I'm not sure why they would use 2 different hoses when you only need one.
The other end of the MBC should lead into the LEFT port of the wastegate actuator. That's the thing the red line is hooked to in this photo:
http://www.pricerightwebsite.com/mr2probs/mr2008.jpg
If that is the way it is hooked up and it is a good MBC, then yo ushould be able to adjust boost.
Depending on the type of MBC you have, you may need to cork the 2nd vac line on the wategate actuator. If you look at this photo:
http://www.pricerightwebsite.com/mr2probs/mr2008.jpg
You see the WG actuator has 2 ports. The one on the right, goes underneath the car to the Turbo-VSV (vacuum switching valve). That is what the ECU uses to limit boost when it is cold outside, coolant temps are not up yet, if it senses knock or any other problems ... some MBCs need this corked, some don't.
5. Your blow-off valve. That is NOT the OEM BPV (by-pass valve). That is the HKS BOV (blow off valve). I would highly recommend you locating an OEM valve and recirculating it. If you look at your photos of your MBC, you will see a huge red cork in your intake pipe before your turbo. That is where the OEM valve is suppose to be recircualted to. If you look at my Web site and cehck out Hyde's mods, there is a photo of my engine bay and you can see my OEM BPV in place. You are losing performance with the valve that is on there.
Lastly, this is a great forum. You may also want to check out
www.mr2oc.com, there is loads of info on there. Good luck with your MR2.