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Hi dont know the exact situation, but mostly this happens because the valve stems leak oil to the cylinders, I had the same problem here in Europe. Try it on the ethanol, makes less polution, just for the exam, or put in the engine denser oil, just for the exam and then change it again. And by the way on europanien cars there is mixture screw dont know about us cars. Of course I know it is injection, but has to have it somewhere, plugged but should be there. Also correct timing affects the emissions, check that. If it has a catalytic converter with Lambda sond, change that. My father used to work for MOT here in Europe. The engine is not bad, just the mixture is slightly rich for some reason. Hope I helped.
Dont run anything to clean the valves, through years it has a deposits on it and by cleaning it u have a big chance to even worsen it,dissolving the deposits resulting in bad sealing, I wouldnt do that. Nothing wrong with the valves as far as I know.
And by last run the gasoline it was made for, u are lucky to have 87 octane gasoline around, here in Europe only 91 and WWII jeeps dont like it at all, smoking, ticking. The more octane gasoline for engine that wasnt built for it, u have to retard the timing otherwise the ignition ignites premature and the mixture is not as effective and produces a lot of CO and HC.
Can be bad for sure, common case, change it and for 80 procent u are through, I work as a mechanic and it is a common fault, O2 sensor is responsible for mixture.
U know throwing codes is sometimes pointless, through the years I solved many cars that didnt throw a code but were not performing good, then u need a real experienced mechanic not just a code reader and changer.I do not want to offense anybody, I admire people working by their hands trying to do some work by themselves. Try the O2 sensor, it is not that expensive, but usually rusted and by unsrewing usually comes a threading.
And at last just asking any chance to pay them to pass it? I know u arent use to it, but corruption rules the Europe. Every mechanic here has a friend at MOT. Just asking, here it is a common practise.
I dont think it's the O2 sensor, but they do have a life span.. whats the mileage? Open loop (idle) doesnt use O2 sensor for fueling. Closed loop (on the gas) does. Higher octane will just allow you to run more timing, but without a knock sensor your not getting any benefit from the higher octane fuel. What were the NOX numbers?