In Montreal too.
Despite Ovett winning 800m gold in Moscow, we never really got to see his full potential at 800m.
He underperformed in the 800 at Montreal, and he and his coach Harry Wilson decided to focus on the 1500m after that (not sure if that was the plan before Montreal, or a response to Montreal).
For the next five or six years or so, Coe would realistically have been his only challenger at 800m had he focused on it (leaving aside Beyer's dodgy performance in Prague 78), with Ivo Van Damme dying, Juantoreno getting injured, and Rick Wolhuter getting old.
1:40 is obviously not realistic, but given the 50 second last lap in Moscow when he was blocked in at the start of it, you'd have to say he was in minimum 1:43 flat shape that day, and so perhaps he could have run a high 1:41 time like Coe had he focused on it, or even like Coe, kept it as his primary event. People forget he was still only 20 at the 76 Olympics. He was also younger than Ivo Van Damme and had always beaten him until Montreal.
I can't post the link, but it was posted recently in 'The Story of Steve Ovett' Facebook group.