the oxygen sensor isnt a likely suspect in my opinion Juan.

When the HC's are high, only...and the carbon monoxide is normal, this doesnt indicate a rich condition always. Based on your gasses, your problems exists in the ignition system. Problem is you're not burning everything thats getting in. Stock plugs will help, also new plug wires. Rusty wires arent cool. If you have weak ignition, and youre not burning the fuel entirely, HC's will go up. Your plug wires probably corroded a lot. Any occasional misfiring? Also, heavy carbon build up will affect HC's and you said the head is way gunked up. Your catalytic converter is fine, there are no indications in the gasses that it isnt functioning.

.2-.8v cycling is fine

burning oil wont change the emissions, believe it or not

Car feel somewhat sluggish? Have a compression gauge handy? Low compression wont aid in the air fuel burning very well either, youll also have a noticeable loss in power.

start with the ignition, from what you said about the corrosion with the wires, out of range plugs...those are some tell tale signs along with high HC's ONLY, that its a problem with the fuels ability to burn right.

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91 Red TSI AWD (RIP)
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"turnin wrenches for nine hours in the pouring rain, just to get the beast up and running again"

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