Hey all, I thought I'd post this here in case someone else is having a similar problem. It's a 1990 240 wagon with an LH 2.4 fuel injection system, a federal car.

My theory of what happened:

There was a broken vacuum line going into the fuel pressure reg. The vacuum line failing is what created the problem which appeared suddenly. The resulting air leak caused the fuel injection system to pour in extra fuel to compensate for the extra air the O2 sensor was detecting. The extra fuel being burned created a lot of soot which I saw exiting the tailpipe at startup. I believed that the soot choked off the O2 sensor eventually killing it. My theory was supported by the Robert Bentley manual which said that a bad O2 sensor can cause bad fuel economy.

I repaired the broken vacuum line, the symptoms persisted. I then replaced the fuel pressure reg, which worked for about 20 miles but then the codes returned. Then I came up with my theory. To test it, I pulled the O2 sensor. The ports were clogged with soot. I blew out the ports with compressed air and reinstalled it and checked it with a voltmeter. Still dead. I then replaced the sensor. I cleared the codes first pushing the diagnostic button for five seconds, releasing waiting for the led to come on steadily, then pressing again for five seconds. Same problem. Then, I cleared the codes AND I disconnected the ground lead from the battery and touched it to the positive battery terminal (something a Volvo mechanic once told me to do to clear the codes--I have no idea why it would make a difference touching the positive terminal rather than simply disconnecting the ground lead, might be total BS. But, disconnecting the ground lead I am told clears out the ECU's adaptive driving memory. Anyway, I started it up did a big test drive and now all the codes are gone and they haven't come back. I'm hoping my catalytic converter isn't ruined! But that might be too much to wish for...
-Ian