Car in question is an 83 turbo with ci injection. Recently, my car began stalling as soon as it had warmed up enough for the O2 sensor to come online. I unplugged the sensor from the wiring harness connector and the car ran fine, but very rich, rich enough for black particles to come out with the exhaust. I tried plugging the sensor back in while the car was running, and after about 30 seconds or so the engine began to bog down, and then almost stalled, but i managed to unplug the sensor and it began to run fine again almost immediately. Now when I plugged in the sensor the frequency valve stopped making noise, and when I unplugged it again the frequency valve started buzzing again as loud as ever. I traced the O2 sensor wire back down behind the engine, and it turned out that it was contacting the block in at least two places, and at one spot it looked like the wire had melted through or broken and the previous owner had just twisted the two ends together and left it. The bare, twisted pieces of wire were contacting the block directly, and must have caused my stalling problem.

My questions: What is the best way to prevent this wire from contacting the block when I replace it? Is there some special kind of heat resistant wire to use? Also, which parts/sensors are likely to have been damaged by this short? I would imagine that this would toast the O2 sensor itself, and I was quoted around $300.00 Canadian for a new O2 sensor, so I was wondering if there was a less expensive alternative.