I still have not figured it out yet unfortunately. I made other threads that compiled everything here along with numerous other things I have done.

I have established that it has gotta have something to do with the idle fluctuations as soon as the engine gets into closed loop. The ICV keeps opening and closing as the vacuum gauge moves with the rpm's. So something in the ignition system is doing it. There are only a few culprits left -- Potentiometer (checked voltage on it and it showed fine), hall sensor and crank position sensor (checked resistance and was within spec).

I am going to start by swapping the entire CIS with the one from my 260E to see what happens. If anything changes then its gotta be the potentiometer as everything else I have swapped on that unit. Then swap the hall sensor from my 260E. My 260E drives great, so whatever I swap should show a difference if it is bad.

__________________
2016 Monsoon Gray Audi Allroad - 21k
2008 Black Mercedes E350 4Matic Sport - 131k
2014 Jeep Wranger Unlimited Sahara - 62k
2003 Gray Mercedes ML350 - 122k