[tirwin]

dyount,

Has this been an ongoing issue or a recent development? edit: I see now from your answer it has gotten worse.

It is odd that taking off the oil cap (inducing a vac leak) stabilizes the idle. And it seems that historically people disconnected the O2 sensor BECAUSE it was causing a hunting idle.

I would not fool with the mixture yet.

You need to check the fuel pressures first. How long has it been since the plugs, plug wires, rotor and cap have been replaced? Looking at the plugs might tell you something useful.

Check your duty cycle at the test port and verify your timing is set properly.

That's where I'd start.