I suppose that could have damaged the IAC valve.

P0506/P0507 - Idle Control System RPM Lower/Higher Than Expected
That doesn't mean exactly mean that the IAC is at fault, but that the PCM cannot properly control the idle speed.

 

Any chance the throttle cable is skewed somehow at the pedal end making it slightly shorter?

 

A quick way to vet that would be to disconnect the throttle cable at the throttle body. If the idle returns to normal, then you know the cable was holding the throttle plate open.

 

I did try that and idle does go down to somewhere like 650 rpm. But I checked the cable everywhere. There is a small BB a few inches from the pedal that is acting as a stopper. Other than that, nothing else is jammed and when connected, it does not sit on the idle stop screw and, that screw hasn't been touched from where it was on the old engine.
I just checked it again. With the cable connected to the TB, there is a 1/8" gap between the TB lever and the stop srew. If I grab the lever and pull it back just a few tousands, idle settles to normal and there is slack in the cable. It is like something other than the cable was forcing the lever forward and opening the throttle plate.
Don

 

This still all sounds entirely mechanical because your cable just isn't letting the TB rotate/return completely. Any chance of an extra hex nut left behind the cable bracket where it mounts to the TB? Is it seated tight against the TB? Anything back there would bump the whole operation out.

 

Good point. If the throttle cable mount isn't installed properly, it could cause the symptoms you are experiencing. The throttle cable mount at the throttle body should mount flat up against the front of the throttle body with a stud type fastener that has the hex portion in the middle. Then the other bracket that is there will mount on top of that with another nut.

 

tjmicsak and swartlkk
You both hit the nail on the head on this one. When I was dismantling the old engine, I put back as many nuts and bolts in their original place so I would not lose them. Photo 004 is how I had put it back and photo 005 is after you put me on track. Now the Jimmy runs like it was just out of the showroom. Thank's guys.
Don