Originally Posted by babears
Trying the IAC now....
I'm guessing that there was no change disconnecting the IAC. When you hold the throttle open it's bypassing the IAC and letting more air in. The backfiring is most likely too much fuel either igniting in the intake, the cylinder, or the exhaust manifolds depending on where it's backfiring from...
Did it make a really cool sound when you downshifted?
Definitely ruled out the TPS.
It should run a lot worse if you disconnected the IAC...If it didn't then I'd spring for the $40 and replace it.
When you disconnected the battery and did the power drain, it reset the ECM and put it in limp, re-learn mode. If it was a glitch it would have relearned and there's a good chance it would have straightened it out.