My 1991 300CE failed smog last time around and it was the EGR valve. The repair was expensive but I qualified for the CA Smog assistance program. You qualify by simply having your testing done at a Test Only facility. IIRC the repair was ~$800, my share ~$300.

AFAIK, there is just the one o2 sensor. Acess to the connection is under the front passenger carpeting. I recently had to check mine, trying to run down a rough idle. Make sure your crimps are good and tight if you are splicing in a generic sensor. Generic sensor about $25 versus about $95 for one with the specified length wire.