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Re: cold air intake o2 sensor
actually, an engine can't draw in any more air than it can pump out, so, no, I don't agree with your buddy, the back pressure doesn't change, the amount of addition air drawn in is more than compensated for by the DME and I service a number of E36's and others with 'cold air' systems without problems. There are no 'performance' sensors or a need for them, they simply measure how much oxygen remains in the exhaust gas compared to the atmosphere and generate a some voltage signal so the DME can continually adjust the fuel quanity to keep the Cat. lit properly.
I think your O2 sensor simply gave up the ghost on it's own due to age.....THERE ARE more to O2 sensor codes than just 'faulty sensor' so beware, but it's common on early E36's to see them fail with age.
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