Mike,

How long has it been since the temp. sensor was replaced (the one the
sends signals to the ECU)?  If performance worsens as it heats up, it
could be your problem.  On the 87's and the like, the sensor and O-ring
cost around $12, on earlier models it was more, I don't know about
85's.  If you can connect temperature to problem, that sensor is more
likely than O2.

Tonya
87 Vanagon GL Wolfs
74 S. Beetle