I want to thank everyone on this thread who helped with advice and info!! Duke, I did the search and read all the research you did which I commend you for, you did a hell of a job on that write up and it was so very helpful, thank you x1000!!
I had no idea about the condition of the o2 sensor so I just installed a new one and was able to get the test done today. I shorted the resistor, blocked the vacuum and 15 minutes before I arrived at the drive thru smog station I rolled all the windows down, turned on the a/c and threw her in third gear. Not only did I pass the test, but I passed with flying colors, and not at all by the skin of my teeth.
Numbers on my failing test:
At 15 mph:
O2 - 4.0 Measured
HC (PPM) - 158 Measured, Max allowed 108
CO - 0.24 Measured, Max allowed 0.71
NO (PPM) - 1329 Measured, Max Allowed 537
At 25 mph
O2 - 4.0 Measured
HC (PPM) - 62 Measured, Max Allowed 83
CO - 0.09 Measured, Max Allowed 0.58
NO (PPM) - 482 Measured, Max Allowed 494
On my passing test:
At 15 mph
O2 - 3.7 Measured
HC (PPM) -28 Measured, Max Allowed 108
CO - 0.08 Measured, Max Allowed 0.71
NO (PPM) - 215 Measured, Max Allowed 537 <----

What a difference!!!
At 25 mph
O2 - 3.8 Measured
HC (PPM) - 55 Measured, Max Allowed 83
CO - 0.12 Measured, Max Allowed 0.58
NO (PPM) - 175 Measured, Max Allowed 494
Once again thank you so much guys, Duke you especially, you helped get my 300E back on the road!!! All your tips and advice work 110% and your research is spot on!!!