Another reason for bad idle
 

Turns out my tachometer was over by a 100 so I was trying to get my 85 to idle at 800 when I was actually setting it at 920 which would give me surging when warm.
I was getting smog checked today and that's how I noticed.

Question isn't really clear. Are you talking about a 1985 3.2 Motronic Carrera?

If so you do not adjust idle speed. The computer adjusts the idle on the fly. The earlier DME chips had the idle set at 800 RPM. The later DME chips changed the idle to 880 RPM.

There is an idle adjustment procedure where you jumper a test port and it lets you adjust things if something is grossly off in the car. (I've never had to do it.) That adjustment doesn't "change the idle speed". It gets things within range so the computer can do its job correctly.

If it isn't kicking down to idle it might be because the idle position switch isn't operating correctly so the DME isn't recognizing that the throttle is in the idle position. Other issues can include vacuum leaks and problems with the ICV (Idle Control Valve).

The way I understand it the OP was using the adjustment procedure with the jumper to center the idle speed at 800, but because the tach was wrong by 100 rpm, he actually set the idle to 900. So once the jumper was removed the Motronic tried to lower the idle speed back to 800, because that's what is hard coded in its EPROM, but it couldn't reach that far down because the ICV was centered on 900.

Actually, one can tweak the idle up/down, +/- 50/75 RPM, and not have idle control algorithm affect it.

Exactly