Check for a vacuum leak -- I'm not familar with the LH-Jet injection system, but likely you have a bad mass air flow sensor, it's dirty, or you have a vacuum leak. Throttle lag is quite typical of a major vaccum leak -- this is often the idle control valve on KD-Jet systems, but I dont' know what or where it is on an LH-Jet system.

Check the injectors for leaking seals by spraying carb or brake cleaner on them. If the idle changes while you spray, the seals are leaking, replace all of them.

Make sure all three wires on the O2 sensor are good -- one is the actual voltage signal (0-1V) and the other two are heater connections -- bad heater connections usually set a check engine light, but not always, and until the sensor is hot, it doesn't read right.

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!