Dyno tests

Not really wondering about tractor pulling but just general differences between rated hp and dynoed power. Dad's second 8070 was power hopping really bad when he bought it new in 84. When he traded it on a new one a year or so later they threw it on the dyno and I think it was putting out 205 hp. Was this common? We traded the third 8070 on an agco 9695 rated at 195hp. It has always run hot when you work it. As in glowing manifold and light coming out of the exhaust stack. We had it dyno tested and it was putting out 265hp on winter diesel. So almost 50% more than it should have been if you add on the difference for summer fuel. Had the engine turned down a bit but the damage was done. Ended up rebuilding it at a little over 6000hrs. The tops of the pistons had started to deform and pieces of carbon were imbeded in them. Still have the tractor but don't use it much anymore. Both the tractors were stock and fuel pump seals were intact. Just curious if this was common back in the days before computers controlled everything on engines.