I am not sure about resetting the computer, I thought it will check the temperature sensor at startup and then will auto reset.

If this car is similar to my 87 260E then the last sensor (closest to the windshield) on the engine block is the fuel injection temperature sensor. Disconnect the cable and check resistance across the sensor terminals. When cold (20 deg C), the resistance should be between 2.5 and 3.5 Kohms. At the engine temperature of 80 deg-c, the resistance should drop to about 250 to 350 ohms. For the system to go into limp mode, I would think that either the sensor has very high resistance OR the cable from the sensor to the computer is broken somewhere.

Another less accurate test would be to see what happens to the RPM when you disconnect the sensor cable when the car is at 80 deg-c. The RPMs should drop a little, if nothing happens, the sensor signal is not reaching the computer.

Infact, I am wondering is you just attach say a 500 ohm resistance across the sensor cables, the car would have some air/fuel mixture problem when cold BUT it should never get into a limp mode. This only works if the sensor wire have no breaks and the signals reach the computer.

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Saumil S. Patel