Smog problem...wrong engine? 454 chevy silverado 2500 1989?

7.4 is the 454. 8.1 would be something like 496. I suspect what they mean by correct is it has to be either the optional engine for that year and model truck or an optional engine for the same model but newer. So this means if your truck originally came with the 5.7 350 engine you could swap in a 7.4 454 out of an 89 in or even an 90-95 since it was basically the same engine. The catch is you also have to swap over all the emissions related equipment and have it all be in working order. I believe at that point the truck then must meet the emissions requirements for the model year of the engine. Most likely your engine does not have any of the emissions equipment on it so that is the first reason its failing.