You are doing the right things so far. Double check the action when you ground the lead. It should take the reading off scale in the opposite direction as the voltage method. BTW a simpler way of biasing the O2 signal positive would be to place one hand on battery positive and the other on the sensor lead to controller.
If you get response to both electric signals, I would suspect that you have too rich of a mixture. The on-off ratio is the result of the compensation necessary to move the mixture to lambda. If it is not 50-50 then the adjustment is wrong. Lean up the mixture.
Bosch Master, ASE Master, L1
33 years MB technician