If your oxygen sensor is flipping between .2 and .8V your mixture test point should be flashing the LED at the same rate. That assumes everything between the sensor and the test point is in order; ECU, connectors, harness... But I think the LED should be connected to the pink wire, if I remember LH2.2 is what you have. Whichever wire, it is the one that goes to pin 22 on the ECU.
The blue-white lead is to be grounded to disable the idle air control motor so you can set the base idle with the big air bypass screw on the throttle body.
I just checked my Haynes, the manual I mean, it is 1994, apparently one printing later than yours. But LH2.2 was pretty much played out by 1990, 1988 for the 240.
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Art Benstein near Baltimore
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