Hey Steve,
Remember your other question about EGT's and housings.....

Well if you want to set up for good low/mid range your going to see some higher EGT's... not nasty, but higher due to the pump settings (more fuel=more HP=more EGT's)
To start you out,
Set AFC diaphram to max setting.
Set Starwheel down (CW) 1 turn.
Set smoke screw down (in CW) 3/4-1 turn.
(Leave full fuel screw alone for now... )
You should get a "puff" of smoke as you nail the throttle, this initial 'shot' of fuel gets the turbo spooling (smoke screw does this) This basically affects the first 50' as I like to say.
Then as the boost begins to climb, you will feel the fueling come on. Check your boost guage and watch when you feel the surge/smoke. The starwheel will determine at what psi your fueling (via the AFC) starts to dump in. I have mine currently set so that it starts to fuel harder at around 8psi. From that point the fuel comes on quickly, and hits max by 10-11psi.
The 16 housing will let you reach that threshold (eg: 7psi, 8psi or whatever) quicker. By the time you have 1/2-3/4 of your max boost you should see your smoke cleaning up to dark grey.
The one issue I can't recal at the moment is that some of the earlier trucks had larger 9mm injectors. (much better than the stock injectors that came with my later 1st Gen)
These meant that there was less "meat" between the injector bore and the exhaust/intake valve opening. Excessive EGT's repeatedly can cause cracking of that area of the head.
To me, excessive means beyond 1250*F for extended periods.
Go with the 16cm housing, no problem, try your settings above as a starting point. Remember that the full fuel screw sends fuel across the power band, with a larger portion of the "increase" to the low/mid range, and resultant smoke/EGt's.
Does this help?? If not let me know or someone else can jump in here to clarify or add something.
Bob.