Steve-
Your symptons of high idle (1600) and then drop to " chug" is exactly what mine does, also a 2.0 with D-Jet.
It seems like two cylinders drop out, #2 and #3 in my case. I've pulled plug wires and injector plugs trying to decide if it is fuel or spark related. I can't tell, of course, because it ain't firing on those two anyway.
I recently vented my valve covers and replaced the PCV with a fixed orifice per R** Green***** suggestions. Now I have an idle around 1800 rpm and no chugging. I can't get the idle any lower. The idle air screw is fully closed. I may make the orifice smaller.
It sure seems like I have a vacuum leak somewhere. This is not to be confused with the fixed orifice PCV as that is a deliberate leak.
I also use the vacuum advance port on the dizzy. I have it hooked to the plenum below the throttle body. The vac advance port on the dizzy is the one farthest from the dizzy body. The vacuum retard port is hooked to the port on the throttle body.
Nothing in my reading tells me this is the "right" way to hook things up, but it has made it run best. I'm probably leaving some performance on the table. With other suggested hook ups I've had the thing so bad you could hardly drive it.
Hopefully some one will chime in with "Hey dummy, set your timing just a hair after the web in the fan at 3500 rpm and tie a knot in both distributor vacuum lines and use a smaller orifice in your PCV line and see what happens"
In the meantime I'll drive it.
Karl