We went through alot of this kind of thing with our '88. When you replaced the sensor did you get a "plug in and drive" w/ correct Bosch part number, or did you get a generic "solder-it-in" type? The solder-in types have a hidden danger. The signal wire from the sensor is co-axial, the actual signal wire at the center, surrounded by insulation, braided grounded shield, more insulation. It's common to not realize that the wire is a coax and just solder the whole mess to the old connector. Instant ground out of the signal wire. To avoid you have to peel back the braided shield to get to the signal wire alone. At one time we found that the wires in the harness leading from the 02 sensor had failed and grounded out far from the sensor. Basically the same coax configuration had worn through it's insulation internally causing signal wire to ground against shield wire. Tough to find, but start with a digital mult-meter. Get out the Bentley and find which pin on the ECU is the input from the O2 sensor, (can't remember at the moment). W/ engine running does this pin show an appropriate signal from an 02 sensor (.5v +/- )? Assuming not, work back along this wire, testing at connectors etc. to the point where the signal does appear. When I discovered the failed section, I just spliced in a new wire to go around it. Protect the new wire to avoid future problems.