Cuts out and backfires could easily be an over-rich condition, too.  Or bad 
plug wires.  Or a leaking airflow sensor to throttle body leak.

Your symptoms tell me that the system cannot manage the fuel mixture when it 
comes out of cold running open loop mode.  When it goes into feedback loop 
mode, the mixture goes way over rich or way over lean and the engine dies.

I've fished around on these systems for a long time (since 1980),  they have to 
be vacuum leak free, the charcoal cartridge for the vapor recovery system has 
to be in good shape, the fuel pumps have to be right with a good fuel filter, 
and the airflow meter must be clean and moving properly.  You must also have a 
good fuel distributor plunger seal (or fuel drips into the intake) and good 
injectors.

Great system when it works, but it can take a while to get it right when it 
acts up.

I would do the following:

Check for intact fuel injector seals, both on the injector and on the plastic 
insert they sit in.

Check for leaking or split idle control valve hoses.

Check for leaks on the boot between the fuel distributor/air meter and the 
throttle body, they shrink and crack with age.

Verify a clear exhaust.

Check the oxygen sensor (a prime suspect, actually, since it acts like it's 
going out of control in closed loop mode).

Check the connector for the oxygen sensor under the right front carpet -- a 
spilled soda or a window left open can cause liquid to collect on the plug and 
corrode it.  It's under the secondary padding.

Check fuel pressures -- if the mechanic doesn't know what you are talking 
about, you need a different mechanic, he's just fishing in the dark.  Base 
pressure, upper and lower chamber pressures, differential drop across the fuel 
distributor.

Check the electrohydraulic regulator on the rear of the fuel distributor, they 
leak when they are bad.  Will also not control differential pressure properly.  
  Make sure it's plugged in....

Mine stalled and backfired while trying to start it when I had a bad fuel pump 
-- on the TE they are in series so one bad makes it refuse to run..  Sedans are 
in parallel.

Check for a clogged or smashed fuel line -- will show up as low fuel pressure.

Make sure the charcoal canister vent is not clogged -- it's the right size for 
a mud dauber to build a nest in.  Will result in serious suction on the tank as 
there will be no air vent.  Also verify that the canister is not fuel soaked, 
as it is cleared when the engine warms up.  Sucking liquid gasoline down the 
intake from a flooded canister will stall it.

Peter
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