Take a look at Steve Brotherton's engine controls DIY article, it explains what's going on pretty good.
Disconnecting the O2 sensor and getting 50% duty cycle indicates you are in closed loop mode, but way off on mixture. Either something is wrong with the EHA or you have another failure (low fuel pressure, etc) or a bad fuel distributor.
You need to check the EHA current to verify the ECU is working correctly, then go from there. Chances are it isn't just a misadjusted mixture if everything was working properly recently. More likely a bad O2 sensor, but it can also be a failed pressure regulator or fuel distributor, I don't know what happens when they go.
However, rough idle and way off on mixture can be a vac leak -- check all the rubber hoses (the idle valve hoses are fairly large) and the line to the booster for leaks. Also, if the engine gets rougher with the brakes on, you can have a leaking brake booster. Eliminate any vac leaks before getting excited -- vac leaks will make it run lean, so the ECU is vainly attempting to richen the mixture up.
1972 220D ?? miles
1988 300E 200,012
1987 300D Turbo killed 9/25/07, 275,000 miles
1985 Volvo 740 GLE Turobodiesel 218,000
1972 280 SE 4.5 165, 000 - It runs!