I'd have more work done than just rods and pistons before going anywhere near a 9800 RPM rev limiter. You're just asking to bend some valves really fast.

Probably the O2 sensor is causing the ECU to default to a safe mode, I don't know why it would do that though because I don't think the ECU actually uses the O2 sensor at that high RPM. It could be the distributor though; if you're losing crank or cam position it might make the ECU hiccup and go into limp home. And CELs when it starts to act weird?