I just went through the exercise last night at the AutoZonk store and paid the $120 for the OEM fit O2 sensor for my '91 245.
A few things to note, all of which make a difference on your '86:
* The heated sensor is used when the sensor is located a distance away from the intake manifold, such as in the catylitic converter on my car.
On your car it's located in the pipe ahead of the cat, so it will need the heated sensor just to give a correct signal to the ECU to adjust mixture.
* If you want to change to the early style intake manifold with the sensor located in the manifold, you could get away with it. Some of the early down pipes had a port just below the flange. Locating it there would be OK also.
* Note on some LH 2.2 cars, you can adjust the AMM to compensate for a off-optimum mixture reading at the O2 sensor if you don't use a heated sensor, but you'll need to put it on a CO analyzer to do it right.
* When you use a universal sensor, which is the exact same 3-wire Bosch sensor without the long pigtail to reach the sensor in the pipe,($45) you'll need to splice the new sensor into the old wire. This is invariably a source of percieved O2 sensor failure when the splice gets a weak signal due to corrosion on the wire inside the not-so-sealed 20 years old wire. I have run into this before and doing the job correctly, then have to do it again a few years down the road is not a good idea, especially if your old O2 sensor harness is less than perfect under the car. You better be a darn good solderer, and have a heat gun to tightly seal the new splice. You could do the whole job, then test the new sensor only to find the voltage is out of range, and the heater leads read poor resistance. Worse yet, have it change response when driving in a terrential rain storm that soaks the wires under the car, like I had happen once.
Is that worth the extra $80? Some would say yes.
--
'89 245 sportwagon, destroyed by hit & run driver, RIP. '04 V70 2.5 T Sportwagon, 12k mi and '91 245 5-speed, 209k mi, replaced the '89