Hiya Uncle kswan,

I trust you own a Bentley, Haynes, or Volvo green factory OEM manual?

Your recently replaced the 02 sensor? Yet you show code 2-1-2 via socket #2 for the LH-jetronic fuel injection and emissions? The Check Engine dash indicator illuminates.
- Check your 'new' 02 sensor using a multimeter to verify whether it is faulty (continuity across harness, heater wire, resistance between green wire and ground during heat-up, and so forth). You can find the procedure restated in the 700-900 FAQ and elsewhere.
- Inspect the harness for damage and ensure it is secure from the sensor along the three (or four) cable securing points.
- You may want to re-seat the connectors.
- Grounded exhaust? Doubtful cause. The bracket that secures the bell-housing to the header pipe in front of the header pipe to cat convertor flange still there? The bracket acts as a ground. A missing bracket may not impact an 02 sensor. This bracket is a necessary support to isolate the critical (and weak link) that is the header pipe output flange with the catalytic convertor input.

I suggest some extra checks as the OBD-1 diagnostic system is not foolproof, so you have it do it LH-2.2 style via the harness.

It is possible you have a faulty 02 sensor? I'll guess you have the Bosch 02 sensor for a 1991 Volvo 240? Not some hack and slash or some knockoff 02 sensor? Any damage to the sensor housing or the wires where they meet the sensor housing body?

More info on OBD codes --
http://www.brickboard.com/FAQ/700-900/EngineOBDCodes.htm

You do not indicate any other error codes. Have you run the test several times to verify you have recorded all fault codes?

Check for codes stored in the EZK-1xx ignition (and emission) control systems through socket #6 on the OBD-1 diagnostic box. The EZK ignition system monitors controls some aspects of the EGR system. Run the search for codes until you have recorded them all.

As you own a 1991 Volvo 240 in mighty California-state, your 240 may have EGR, and some symptoms you mention suggest a faulty EGR system.

Though locate and remedy the LH-Jetronic fault code 2-1-2 (faulty or missing oxygen sensor signal) before futzing with other systems (unless you have other fault codes).

Welp, I guess that does it. Post your answers back. Hope that helps.

Bigelow Earl Grey Tea Boy-eeeeeeeeeeeeeeeeeeeeeeeeee
--
Well hunnied and milked!