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The engine could turn 8,000rpm's but the drivetrain wouldn't like it ! That Spicer 3053 would not like turning that fast at all ! Not to mention the transfer-case or drivelines or differentials ! Remember those high RPM engines are coupled to high tolerance, fine tooth, small gear transmissions...
The older M series Allison was a close ratio 6 speed. Since the torque range of this engine is real small you could adjust the shift points to correspond with the right RPM range. The "Dual Range" Hydromatic which this truck has, has a wider range of gear ratios. Also without a torque converter...
That transmission is shifting really good ! I have rebuilt many of these older "Dual Range Hydromatics" . They are great transmissions but they don't have torque converters (no staters ) only fluid couplers. So you don't get any torque multiplication from the coupler. You can install an older...