Saumil, ps2cho, thank you for your input.

I may be missing a point here but I think Idle Air Control Valve takes air in after the sensor plate but before the throttle, then to intake plenum (after throttle plate), so its opening should have the same effect as throttle opening, and to allow for more fuel for higher rpm via metering plate opening.

What puzzles me is that engine idles absolutely perfectly when Idle Air Control Valve is unplugged. And when plugged in, RPM oscillates rapidly. So, metering plate mis-adjustment is somewhat unlikely. I actually pushed in metering plate a bit at one point and doing so did not stop RPM oscillation as Idle Air Control Valve kept opening/closing. I will double check this this weekend though. Maybe I need to push metering plate harder.

I owned a number of cars with K and L Jetros in the past (not KE though) and this issue was always due to sticking Idle Air Control Valve. Just cleaning it with a heavy dose of carb. cleaner fixed it - of course those valves were simple opening plate with bimetal strip and heating coil attached to it - not a servo motor like this KE system's). This time, I have a brand new valve that actually is doing exactly what CPU is commanding. So, I keep thinking that either CPU is getting a wrong info (frail wire, corroded connection, fried unit, etc.) or proper signal is not reaching the valve (frail wire, short, etc.).

What do you think?

By the way, when motor does not do this oscillation, it runs oh so sweet. Smooth, perfect idle to nice even delivery of power to higher rpm. It is quite quiet, not a miss of any sort. Just perfect...

Then, out of blue, it may start oscillating.