I can't remember how TV-am were involved ? I seem to recall C4 covered the action during breakfast ?
TV-am weren't involved in 1988. They were supposed to be involved in 1984, but there was an industrial dispute which couldn't be settled and they had to pull out, which led to the collapse of the entire ITV coverage.
ITV showed the Olympics on a couple of occasions. They covered them in 1972, but didn't give them comprehensive coverage, they had two shows a day at 5pm and 10pm (the latter billed as News And Olympics At Ten), and the TV Times said "Want to watch Val Doonican and the Olympics? On ITV you can do both!". They didn't cover them in 1976, but they did in 1980. The coverage that year was scaled back quite dramatically on the Beeb due to the boycott, with only three or four hours a day, so ITV did as much if not more coverage than the Beeb. As mentioned they were supposed to cover it in 1984, but didn't, then they did in 1988.
Coverage was split between ITV, during the day, and C4 overnight and at breakfast time, though as you say it was all produced by ITV Sport at Thames. Barry Norman was indeed one of the presenters, doing overnights on C4, and there was quite a lot of coverage, although not as much as on the Beeb, and ITV's main highlights show each day was at 5.15 while the Beeb's was at seven. At this point ITV had the rights to British athletics so they showed quite a lot of it and had a dedicated team so it made sense they'd cover this as well. But seemingly it was too much effort for too little reward, and that was the end of it.