Does the 16valve have variable valve timing? If so, if the cam is installed incorrectly, the valve timing will be way off.

Raw fuel at the exhaust means either a serious fuel supply problem or a serious ignition problem UNLESS you have a leak in the exhaust ahead of the o2 sensor -- if outside air is getting into the exhaust (it will get sucked in in pulses at idle), the O2 sensor reading will be way off.

Have you tried to set the idle mixuter with the EHA unplugged using a CO meter?

Peter

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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!