Stumbled across this old thread and thought I'd add some info after talking to both Miles and Wally recently.
It is indeed Wally playing the solo on "Time for a Change." And although it's Phil's song, the solo was actually composed by violinist Miles Golding. Wally thought it was perfect and copied it note for note... but he was frustrated by not getting the actual sound he was looking for. He had the luxury of three days to record his guitar parts for "Mental Notes" but every song had multiple guitar layers. Harrowing, he said.
Wally's amp was incredibly loud in the studio but sounded tiny in the control room. Eddie still laughs at the memory of Wally sweating like a rock god while making plink plink noises. Apparently the recording engineer wasn't at all interested in the group or their music. The Enz would turn up to the studio and see a sign on the door saying "Gone Fishing."