My poor '92 740 Wagon (not turbo) stinks.

Often when I crack the driver's side window, the passenger compartment fills with acrid, very rich exhaust. This is an intermittent problem, but more often than not lately.

It gives a check engine code (221 - O2 sensor) only when left at idle for a period of time (think busy drive-thru, not traffic light). I'll gladly replace the O2 sensor (if someone can tell me where to look for the connection under the hood), but I'd like to know if there's something else I should be checking first. For what it's worth, if I pull the fuse for the sensor, the idle changes, leading me to believe that it is working.

Could someone point this frustrated (and a little stinky) girl in the right direction? Thank you.