[blk924s]

My 88 924s has been running quite rich for a couple weeks now and is idling rough due to misfiring and occasional minor hunting. I had had a huge air leak past the ISV which I fixed and the car ran absolutely great for a week or 2, and then I noticed the current problem when I revved it up and black fuel smelling smoke billowed from the muffler.
I checked emissions an verified that the hydrocarbons are high, and then checked fuel pressure and it is right on at idle and under load.
I bought a faze air/fuel guage and wired it in, and found something interesting. Before the O2 sensor warms up, the guage reads just lean of ideal. As it warms the guage reads leaner and leaner until it is fully in the red. Under load the red lean LED shines even brighter, even though there is clearly unburned fuel dumping out the exhaust. Since the guage reads the O2 signal and the sensor clearly things the harder I press the gas the leaner it gets, does this mean the O2 sensor is faulty and is telling the DME give me all the fuel you've got?