Lets start here....

Visual Inspection: PASS          Functional Check: FAIL          Emissions Test: FAIL  

Functional failure:  Ignition Timing
Emissions failure: Excessive NOx

From part one:
The ignition timing is right on the money at 0° BTDC. The engine seems to run well but the idle speed is high.

The ignition timing functional failure is due to idle engine speed being too high. That will have to be diagnosed and fixed, but lets first look at the tailpipe (emissions) failure.

From part one:
The California ASM smog test is done on a dyno at two speeds and loads. For the three critical gases (HC, CO, and NOx) there is a max value, an average value, and the actual measured value.

One of the first things we need to do is to establish whether or not the ECM is in fuel control. 

Lambda tells us that we're running 3 % lean. I'm ok with that. I would say we're in fuel control. 

At 21 ppm, HC is actually below the average reading. No problem there. A CO reading of 0.02 % is also well below average and certainly passing. Now NOx..... is 150 % more than  max and about 600 % more than the average. 

Excessively lean mixtures can cause NOx to soar. I don't think I would call 3 % lean excessively lean..... I think its prudent at this point to check the most likely cause. The EGR system.

Two other things of note: The O2 reading of 0.7 % is slightly high but makes sense considering the mixture is 3 % lean. The combined combustion efficiency (both engine and converter) of 99 % speaks well of fuel control and converter oxidation.     

We're essentially observing the same relationships here. Of note however is that as lambda drops closer to perfect  (now only 2 % lean) we have a little less leftover oxygen and a little less NOx. However NOx is still way too high. At this rate even if we achieve a perfect air-fuel ratio NOx will still be beyond the allowed limits.

At this point if we replace the EGR valve the emissions (tailpipe) portion of the test will pass.

So now lets get back to that functional test....

From part one:
The throttle body minimum air rate cap is still in place and the TPS in not adjustable

I would say the ECM knows that the throttle is closed. Wouldn't we expect it to try to  bring the engine speed down by commanding the IAC valve to close off the air passage (lower iac counts)? 165° F is not cold enough for a commanded rpm of 1150... You would think the IAC counts would be 0.

I'd be lying if I told you I carefully examined the scan data for anomalies etc at this point. I did what most of you would have done. I grabbed a can of brake clean and shot a stream at the throttle body base. Yep! Its leaking vacuum... Replacing the gasket took care of the high idle, the functional failure, and brought lambda very close to perfect. 

The truck will now pass the smog inspection with flying colors. But do we just ignore the scan data? What's going on with the high idle speed and the lack of ECM attempt to lower it?

I think the answer lies in an obscure TSB and system strategy. 

ESI Document ID # 226356
REVISED TECH 1 MASS STORAGE CARTRIDGE (MSC) OXYGEN SENSOR #51-65-47  REVISION: 01/18/96
SUBJECT: REVISED TECH 1 MASS STORAGE CARTRIDGE (MSC) OXYGEN SENSOR TEST

A snippet....

THERE ARE SOME APPLICATIONS (FOR EXAMPLE THE '88/'89 5.0/5.7L TBI TRUCK) THAT COMMAND O2S VOLTAGE UNDER 150 MV DURING HIGH RPM AND LOW LOAD CONDITIONS LIKE THOSE EXISTING DURING THE O2S TEST

TO DETERMINE IF YOUR VEHICLE HAS THIS FUEL CONTROL CALIBRATION, HOLD ENGINE SPEED AT 2000 RPM WHILE MONITORING O2 VOLTAGE AND SHORT TERM FUEL TRIM. IF THE VEHICLE HAS THIS CALIBRATION, THE SHORT TERM FUEL TRIM WILL BE FIXED AT 128 WHILE THE O2S VOLTAGE REMAINS LOW((150 MV).

Under the above conditions the ECM will go into decel enleanment mode. The blown TBI gasket somewhat simulates a cracked throttle and so (with the extra fuel now added) we have a very low load (engine vacuum around 21"). 

I think this fits.... with the oxygen sensor voltage fixed below 450mv and the integrator pretty much stuck at 128, I believe we can say fuel trim learn has been disabled. 

The block learn of 145 I believe is due to the blown throttle body gasket. The gasket is torn on only one side of the throttle body and so will be affecting one plane of the manifold more than the other. 

The big question of why the ECM is reacting this way knowing full well the throttle is closed is not something I can answer except to say.... Its just one of those things.... (g)

If we had monitored the oxygen sensor signal while the truck was on the dyno we would have seen it switching normally.

In closing let me mention a scan tool anomaly. The Tech 1 displayed the Air Control Solenoid command PID. The truck is not equipped with air injection. That's just another one of those things.... (g)

I wish I could go back 15 years with the knowledge and tools I have now. There were so many odd and interesting things I just blasted through. So many lost opportunities... (g)