Actually it is possible for a failed O2 sensor to cause a backfire. If it reads a lean fuel/air ratio it will dump fuel in the engine which gets ignited in the catylitic converter.
The lack of power is from the rich mixture. It can make a big difference.
Have you noticed if the car is consuming more gas?
With the mileage on the car a new O2 sensor is due for replacement.
It will be worth getting the trouble code scannow as the intermitantly or slowly degrading part has now fallen far enough out of spec that it is throwing a code and that will be worth the 15-30 minutes of labor you might be charged at a repair shop. If you plan to keep the car, readers are getting cheap enough to purchase. Under $100.00. We will always be here to translate codes for you if need be.
I will keep an eye on this post for your reply.
Friday, September 23rd, 2011 AT 9:21 PM