The O2 sensor DOES ground to the exhaust. The gotcha is that the ECU has
a dedicated ground wire for just the O2 sensor and it connects elsewhere
to the engine. This is the problematic O2 ground wire. It is not visibly
connected to the O2 wiring in any way. It is a small brown wire that
comes out of the same small bundle that goes to the distributor hall
connector. I'm sure everyone assumes it has something to do with the
distributor when in reality that brown wire is for the O2 sensor
circuit. It needs to be in good shape and make a clean metal to metal
connection to the engine. VW often bolted it down to the square PLASTIC
crankcase breather assembly and this has proven to be a problem over
time. The stud for the breather can make a good ground but with time the
  plastic deforms and the nut loosens, weakening the O2 ground signal.

Mark

Todd Last wrote:

> I've seen bad ground and shorted sensor wire mentioned in the references to the O2 sensor.
>
> How does one check these wires?
>
> VOM from the connector on the O2 out to the connector on the ECU?
>
> Seems odd to me that the o2 sensor does not ground to the exhaust.
>
>
> Todd
> '88 Westy
>