You're right about the third oxygen sensor. But I'll bet my neighbor's cat your car only takes one. A call to Phil should clear it up.
Any mechanic should be able to test an oxygen sensor. If yours is original, age alone says it's ready for retirement. BUT, it might not fix your emissions problem. Especially the CO part.
If you have no problem accelerating with a full load and getting to 160km/h fairly quickly and you don't smell sulfur/rotten eggs, I doubt your catalytic converter is bad.
You and your mechanic should go through this article and see if anything applies. http://www.peachparts.com/Wikka/EngineControls
Ignore the blocked EGR passage part.