I've got an unusual problem and I'm hoping someone who has run into this before can offer me some insight. Here's the situation:

1986 Volvo 240 Wagon, original B230F engine with unknown mileage (broken odometer). The owner requested my assistance last week after a no-start condition. It looked to be running rich and several items needed attention. Items replaced are:
1. Spark plugs, old ones badly fouled with carbon deposits.
2. Used, but clean, Idle Air Control Valve and tubing, replacing a clogged unit on the car.
3. New Accordion Tube from AMM to Throttle Body (old one was cracked and beyond repair.
4. New Fuel Pressure Regulator (Bosch), replacing an old one of unknown date/miles.
5. Also performed a quick cleaning of the Throttle Body (without removing it), Idle Adjustment passageway (black thumb wheel), and the Flame Trap (already mostly clean from a previous tune up I performed on this vehicle last summer).

After the tune-up I was inspecting the various vacuum hoses and disconnected the PCV small diameter vacuum hose that enters the intake manifold. The idle speed dropped as normal (mixture leaned out) but I noticed a steady stream of gas escaping the tube coming off the flame trap. It looks to be exhaust (sorry, I can't smell), is not oily, and does have some moderate pressure behind it. I disconnected both of the output tubes from the flame trap and verified that it is definitely coming from the engine's crank case. Fearing blown rings, I promised to return a week later with a compression tester.

Today, I compression tested all the cylinders. Upon removing the spark plugs, they were already developing some moderate carbon deposits after only 100 miles of driving. Electrode, insulator, and plug housing all showed carbon deposits (not oily) that I would only expect after 30,000 miles in one of my own vehicles. I performed two compression tests with the engine warm, WOT, and the fuel and ignition disconnected on both tests:
Cylinder 1: 195 psi, 195 psi.
Cylinder 2: 192 psi, 193 psi.
Cylinder 3: 188 psi, 191 psi.
Cylinder 4: 196 psi, 195 psi.

When the vehicle shipped from the factory, the compression values should have been at about 170 psi (FYI, for those who are reading this out of curiosity, 128 psi is the minimum acceptable limit), and I'm guessing it has a bit of carbon buildup inside the chambers, and thus the higher numbers. But, I am assuming that the rings and valves are fine, based on the consistent/balanced test results. Has anybody encountered this problem before? I've got a steady stream of almost clear/slightly-brown gas coming from the PCV system (flame trap) and the engine fouls plugs. I'm speculating/wondering if there's an unrelated problem causing it to run rich, and the exhaust in the crankcase is from ring-blow-by due to the increased compression ratio. Any thoughts or tips on where to investigate further?

Also, I haven't replaced the O2 sensor yet and I don't know when it was last replaced. Its voltage jumps around between .15 and .75 as expected, hovers around .4 to .6, but this doesn't guarantee that the sensor is within calibration specs. When the throttle is goosed, the O2 sensor voltage drops to 0.00 for a few seconds which I thought was unusual. The Bosch 007 AMM seems ok, but I'm planning on swapping it for one of my known good units, just to rule it out.

God bless, and thanks for any assistance you can offer.
Fitz Fitzgerald.
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'87 Blue 245, NA 232K