Major MPG dropoff M104 E320 & smell

[TROVERMAN]

Recently my 1995 E320 wagon has experienced a major gas mileage drop. On the 19 gallon tank, we usually get about 400-450 miles on the tank. About 24-26 MPG. We are now getting around 250-300 miles on the tank, or 15-18 mpg. No Check Engine light has illuminated, but maybe the bulb is out? (It doesn't illuminate briefly on startup, either; should it?) There is no gas smell, and no visible leaks. My guess is the single O2 sensor before the cat. Is the mileage change this bad? The car smells like it is running rich from the exhaust, and it starts up now kind of like a carburetted car getting too much gas. Before I pay 120-150 dollars on a new O2 sensor, could it be the wiring harness sending incorrect engine temp reading to engine? How can I determine? Harness appears O.K., car still runs fine, all electrical O.k., just bad gas mileage, and a smellier exhaust. Thanks in advance. Car now has just turned 60,000 miles.