Unless they have changed the design of the Hitco exhaust blanket, there is a hole (approx. 1. 5" in dia. ) centered directly over the partition within the exhaust manifold outlet with the expressed intent of allowing the user to install the thermocouple EITHER in the 1-2-3 runner OR the 4-5-6 runner. Picture this; if the exhaust blanket is correctly installed, the thermocouple will either be touching the front edge of the hole (1-2-3 position) or the back edge of the hole (4-5-6 position). There is NO reason to drill or punch additional holes in the exhaust blanket.
Chris, you will have to disconnect the thermocouple to install the exhaust blanket... unless you wanted to slit the thermocouple hole in the exhaust blanket to one edge (not recommended).