I have a concern about my 240 wagon. I have had the car for about nine months now and every time I start from cold the idle wavers for a couple seconds then it will smooth out. The car will start, rev high to about 1500 then slow to about 600 then rev back three or four times. Sometimes it will stall when the revs drop. I recently replaced the water pump and it seems like the revs drop lower since the pump change (coincidence?). Otherwise the car runs well and has fairly decent power. Is this something to be concerned about? What are some possible causes?
Thanks,
Nick

I would check the seals around the fuel injectors first.
IMO when the engine warms up and the head and seals expand they will seal up a little better than when the engine is cold. You can confirm this with testing with propane being squirted around each of the fuel injectors when the engine is cold and see if the idle evens out.

Also make sure you don't have any vaccuum leaks.
It may also be the IAC is sticking until warm-up.

I was just reading the 700/900 FAQ. Do these symptoms match a dirty throttle body?